Conformed Copy
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CHIRON CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Trustee
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INDENTURE
Dated as of November 15, 1993
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1.90% Convertible Subordinated Notes
due 2000
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TABLE OF CONTENTS*
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of Indenture . . . . . . . . . . . . . . . . . . . . . . . 1
Form of Face of Note . . . . . . . . . . . . . . . . . . . . . . . 1
Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . 5
Form of Reverse of Note. . . . . . . . . . . . . . . . . . . . . . 6
Form of Conversion Notice. . . . . . . . . . . . . . . . . . . . . 12
Form of Assignment . . . . . . . . . . . . . . . . . . . . . . . . 14
Form of Option to Elect Redemption Upon
a Fundamental Change. . . . . . . . . . . . . . . . . . . . . . 16
Compliance with Legal Requirements . . . . . . . . . . . . . . . . 18
ARTICLE ONE
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . 18
Affiliate . . . . . . . . . . . . . . . . . . . . . 18
Applicable Price . . . . . . . . . . . . . . . . . . 18
Board of Directors . . . . . . . . . . . . . . . . . 19
Common Stock . . . . . . . . . . . . . . . . . . . . 19
Company . . . . . . . . . . . . . . . . . . . . . . 19
Conversion Rate . . . . . . . . . . . . . . . . . . 19
Depositary . . . . . . . . . . . . . . . . . . . . . 19
Event of Default . . . . . . . . . . . . . . . . . . 20
Fundamental Change . . . . . . . . . . . . . . . . . 20
Fundamental Change Redemption Date . . . . . . . . . 20
Indenture . . . . . . . . . . . . . . . . . . . . . 20
Issue Price .. . . . . . . . . . . . . . . . . . . 20
NASDAQ System . . . . . . . . . . . . . . . . . . . 20
Note or Notes . . . . . . . . . . . . . . . . . . . 20
Noteholder . . . . . . . . . . . . . . . . . . . . . 20
Officers' Certificate . . . . . . . . . . . . . . . 20
Opinion of Counsel . . . . . . . . . . . . . . . . . 21
Original Issue Discount . . . . . . . . . . . . . . 21
Outstanding . . . . . . . . . . . . . . . . . . . . 21
Person . . . . . . . . . . . . . . . . . . . . . . . 22
PORTAL Market . . . . . . . . . . . . . . . . . . . 22
Predecessor Note . . . . . . . . . . . . . . . . . . 22
Principal Office of the Trustee . . . . . . . . . . 22
QIB . . . . . . . . . . . . . . . . . . . . . . . . 22
Redemption Price . . . . . . . . . . . . . . . . . . 22
Reference Market Price . . . . . . . . . . . . . . . 22
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* This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
i
Responsible Officer . . . . . . . . . . . . . . . . 22
Restricted Note . . . . . . . . . . . . . . . . . . 23
Rule 144A . . . . . . . . . .. . . . . . . . . . . 23
Senior Indebtedness . . . . . . . . . . . . . . . . 23
Trigger Event . . . . . . . . . . . . . . . . . . . 24
Trustee . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.01 Designation, Amount and Issue of
Notes . . . . . . . . . . . . . . . . . . . . . . . 24
2.02 Form of Notes. . . . . . . . . . . . . . . . . . . . 24
2.03 Date and Denomination of Notes;
Payments of Interest. . . . . . . . . . . . . . . . 25
2.04 Execution of Notes. . . . . . . . . . . . . . . . . . 26
2.05 Exchange and Registration of Transfer
of Notes; Restrictions on Transfers; Depositary . . 27
2.06 Mutilated, Destroyed, Lost or
Stolen Notes . . . . . . . . . . . . . . . . . . . 34
2.07 Temporary Notes . . . . . . . . . . . . . . . . . . . 35
2.08 Cancellation of Notes Paid, etc . . . . . . . . . . . 36
ARTICLE THREE
REDEMPTION OF NOTES
SECTION 3.01 Redemption Prices . . . . . . . . . . . . . . . . . . 36
3.02 Notice of Redemption; Selection of
Notes . . . . . . . . . . . . . . . . . . . . . . . 37
3.03 Payment of Notes Called for Redemption. . . . . . . . 38
3.04 No Sinking Fund . . . . . . . . . . . . . . . . . . . 39
3.05 Conversion Arrangement on Call
for Redemption . . . . . . . . . . . . . . . . . . 39
ARTICLE FOUR
SUBORDINATION OF NOTES
SECTION 4.01 Agreement of Subordination . . . . . . . . . . . . . 40
4.02 Payments to Noteholders . . . . . . . . . . . . . . . 41
4.03 Subrogation of Notes . . . . . . . . . . . . . . . . 43
4.04 Authorization by Noteholders . . . . . . . . . . . . 44
4.05 Notice to Trustee . . . . . . . . . . . . . . . . . . 45
4.06 Trustee's Relation to Senior Indebtedness . . . . . . 46
4.07 No Impairment of Subordination. . . . . . . . . . . . 46
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ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01 Payment of Principal and Interest . . . . . . . . . . 47
5.02 Offices for Notices and Payments, etc . . . . . . . . 47
5.03 Appointments to Fill Vacancies in Trustee's Office. . 47
5.04 Provision as to Paying Agent . . . . . . . . . . . . 48
ARTICLE SIX
NOTEHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 6.01 Noteholders' Lists . . . . . . . . . . . . . . . . . 49
6.02 Preservation of Lists . . . . . . . . . . . . . . . 49
6.03 Reports by the Trustee . . . . . . . . . . . . . . . 50
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND
NOTEHOLDERS ON THE EVENT OF DEFAULT
SECTION 7.01 Events of Default . . . . . . . . . . . . . . . . . . 50
7.02 Payment of Notes on Default; Suit Therefor . . . . . 53
7.03 Application of Monies Collected by Trustee. . . . . . 55
7.04 Proceedings by Noteholder . . . . . . . . . . . . . . 56
7.05 Proceedings by Trustee . . . . . . . . . . . . . . . 57
7.06 Remedies Cumulative and Continuing . . . . . . . . . 57
7.07 Direction of Proceedings and Waiver
of Defaults by Majority Noteholders . . . . . . . . 58
7.08 Notice of Defaults . . . . . . . . . . . . . . . . . 59
7.09 Undertaking to Pay Costs . . . . . . . . . . . . . . 59
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ARTICLE EIGHT
CONCERNING THE TRUSTEE
SECTION 8.01 Duties and Responsibilities of Trustee. . . . . . . . 60
8.02 Reliance on Documents, Opinions, etc. . . . . . . . . 61
8.03 No Responsibility for Recitals, etc. . . . . . . . . 62
8.04 Trustee, Paying Agents, Conversion
Agents or Registrar May Own Notes . . . . . . . . . 63
8.05 Monies to be Held in Trust . . . . . . . . . . . . . 63
8.06 Compensation and Expenses of Trustee . . . . . . . . 63
8.07 Officers' Certificate as Evidence . . . . . . . . . . 64
8.08 Eligibility of Trustee . . . . . . . . . . . . . . . 64
8.09 Resignation or Removal of Trustee . . . . . . . . . . 64
8.10 Acceptance by Successor Trustee . . . . . . . . . . . 66
8.11 Succession by Merger, etc . . . . . . . . . . . . . . 66
ARTICLE NINE
CONCERNING THE NOTEHOLDERS
SECTION 9.01 Action by Noteholders . . . . . . . . . . . . . . . . 67
9.02 Proof of Execution by Noteholders.. . . . . . . . . . 67
9.03 Who Are Deemed Absolute Owners. . . . . . . . . . . . 68
9.04 Company-Owned Notes Disregarded . . . . . . . . . . . 68
9.05 Revocation of Consents; Future Holders Bound. . . . . 69
ARTICLE TEN
NOTEHOLDERS' MEETINGS
SECTION 10.01 Purposes of Meetings. . . . . . . . . . . . . . . . . 69
10.02 Call of Meetings by Trustee . . . . . . . . . . . . . 70
10.03 Call of Meetings by Company or Noteholders . . . . . . 70
10.04 Qualifications for Voting. . . . . . . . . . . . . . . 70
10.05 Regulations. . . . . . . . . . . . . . . . . . . . . . 71
10.06 Voting . . . . . . . . . . . . . . . . . . . . . . . . 71
10.07 No Delay of Rights by Meeting. . . . . . . . . . . . . 72
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ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01 Supplemental Indentures without Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . 72
11.02 Supplemental Indentures with Consent of Noteholder. . 74
11.03 Effect of Supplemental Indentures . . . . . . . . . . 75
11.04 Notation on Notes . . . . . . . . . . . . . . . . . . 75
11.05 Evidence of Compliance of Supplemental Indenture to
be Furnished to the Trustee . . . . . . . . . . . . 75
ARTICLE TWELVE
CONSOLIDATION, MERGER,
SALE, CONVEYANCE AND LEASE
SECTION 12.01 Company May Consolidate, etc., on Certain Terms . . . 75
12.02 Successor Corporation to be Substituted . . . . . . . 76
12.03 Opinion of Counsel to be Given Trustee. . . . . . . . 77
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01 Discharge of Indenture. . . . . . . . . . . . . . . . 77
13.O2 Deposited Monies to be Held in Trust by Trustee . . . 78
13.03 Paying Agent to Repay Monies Held . . . . . . . . . . 78
13.04 Return of Unclaimed Monies. . . . . . . . . . . . . . 78
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01 Indenture and Notes Solely Corporate Obligations. . . 79
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ARTICLE FIFTEEN
CONVERSION OF NOTES
SECTION 15.01 Right to Convert. . . . . . . . . . . . . . . . . . . 79
15.02 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for
Interest or Dividends . . . . . . . . . . . . . . . 80
15.03 Cash Payments in Lieu of Fractional Shares. . . . . . 82
15.04 Conversion Rate . . . . . . . . . . . . . . . . . . . 82
15.05 Adjustment of Conversion Rate . . . . . . . . . . . . 82
15.06 Effect of Reclassification, Consolidation, Merger
or Sale . . . . . . . . . . . . . . . . . . . . . . 88
15.07 Taxes on Shares Issued. . . . . . . . . . . . . . . . 89
15.08 Reservation of Shares; Shares to be Fully Paid;
Compliance with Governmental Requirements;
Listing of Common Stock . . . . . . . . . . . . . . 89
15.09 Responsibility of Trustee . . . . . . . . . . . . . . 90
15.10 Notice to Holders Prior to Certain Actions. . . . . . 91
ARTICLE SIXTEEN
REDEMPTION OF NOTES
AT OPTION OF HOLDERS
SECTION 16.01 Option to Elect Redemption Upon a Fundamental
Change. . . . . . . . . . . . . . . . . . . . . . . 92
16.02 Deposit of Funds for Redemption . . . . . . . . . . . 93
ARTICLE SEVENTEEN
MISCELLANEOUS PROVISIONS
SECTION 17.01 Provisions Binding on Company's Successors. . . . . . 93
17.02 Official Acts by Successor Corporation. . . . . . . . 93
17.03 Addresses for Notices, etc. . . . . . . . . . . . . . 94
17.04 Governing Law . . . . . . . . . . . . . . . . . . . . 94
17.05 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee . . . . . . . . . . . . . . 94
17.06 Legal Holidays. . . . . . . . . . . . . . . . . . . . 95
17.07 No Security Interest Created. . . . . . . . . . . . . 95
17.08 Benefits of Indenture . . . . . . . . . . . . . . . . 95
17.09 Table of Contents, Headings, etc. . . . . . . . . . . 95
17.10 Execution in Counterparts . . . . . . . . . . . . . . 95
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Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
vii
INDENTURE dated as of November 15, 1993 between CHIRON CORPORATION,
a Delaware corporation (hereinafter sometimes called the "Company"), and The
First National Bank of Boston, a national banking association organized and
existing under the laws of the United States of America, as trustee hereunder
(hereinafter sometimes called the "Trustee").
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 1.90% Convertible Subordinated Notes due 2000
(hereinafter sometimes called the "Notes"), in an aggregate principal amount at
maturity not to exceed $243,800,000 and, to provide the terms and conditions
upon which the Notes are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes and a form of conversion notice are to be substantially in the
following forms, respectively:
[FORM OF LEGEND FOR GLOBAL NOTE:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[FORM OF FACE OF NOTE]
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS NOTE BEARS ORIGINAL
ISSUE DISCOUNT. THE ISSUE PRICE WITH RESPECT TO EACH $1,000 OF PRINCIPAL
AMOUNT AT MATURITY OF THIS NOTE IS $845.35, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL AMOUNT AT MATURITY OF
THIS NOTE IS $154.65, THE ISSUE DATE IS NOVEMBER 17, 1993 AND THE YIELD TO
MATURITY BASED ON SEMIANNUAL COMPOUNDING IS 4.50%.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER
THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE EXCEPT (A) TO CHIRON CORPORATION OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED
TO THE FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE, A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH
NOTE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE
TO THE FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS
NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED AFTER
2
THE EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
CHIRON CORPORATION
1.90% CONVERTIBLE SUBORDINATED NOTES DUE 2000
No. $_____________
CUSIP 170040 AB 5
CHIRON CORPORATION, a corporation duly organized and validly existing
under the laws of the State of Delaware (the "Company", which term includes any
successor corporation under the Indenture referred to on the reverse hereof),
for value received hereby promises to pay to ______________, or registered
assigns, the principal sum of ____________ Dollars on November 17, 2000 at the
office or agency of the Company maintained for that purpose in New York, New
York, in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest, semi-annually on May 17 and November 17 of each year,
commencing May 17, 1994 on said principal sum at said office or agency, in like
coin or currency, at the rate per annum of 1.90% from the May 17 or the November
17, as the case may be, next preceding the date of this Note to which interest
has been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of this
Note, or unless no interest has been paid or duly provided for on the Notes, in
which case from November 17, 1993 until payment of said principal sum has been
made or duly provided for. Notwithstanding the foregoing, if the date hereof is
after any May 1 or November 1, as the case may be, and before the following May
17 or November 17, this Note shall bear interest from such May 17 or November
17; PROVIDED, HOWEVER, that if the Company shall default in the payment of
interest due on such May 17 or November 17, then this Note shall bear interest
from the next preceding May 17 or November 17 to which interest has been paid or
duly provided for or, if no interest has been paid or duly provided for on the
Notes, from November 17, 1993. The interest so payable on any May 17 or November
17 will be paid to the person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the record date,
which shall be the May 1 or November 1 (whether or not a business day) next
preceding such May 17 or November 17, provided that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture.
3
Interest may, at the option of the Company, be paid by check mailed to the
registered address of such person.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and interest, if
any, in respect of the Notes to the prior payment in full of all Senior
Indebtedness as defined in the Indenture and provisions giving the holder of
this Note the right to convert this Note into Common Stock of the Company on the
terms and subject to the limitations referred to on the reverse hereof and as
more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee under the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
CHIRON CORPORATION
Dated: By:
---------------------------------
Title:
[Seal]
Attest:
- ------------------------------
Secretary
4
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF BOSTON,
as Trustee
By:
-----------------------------
Authorized Signatory
5
[FORM OF REVERSE OF NOTE]
CHIRON CORPORATION
1.90% CONVERTIBLE SUBORDINATED NOTES
DUE 2000
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 1.90% Convertible Subordinated Notes due 2000 (herein called
the "Notes"), limited to the aggregate principal amount at maturity of
$243,800,000 all issued under and pursuant to an Indenture dated as of November
15, 1993 (herein called the "Indenture"), between the Company and The First
National Bank of Boston (herein called the "Trustee"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount at maturity of the Notes at the time outstanding, evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Notes; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, reduce the rate or
extend the time of payment of interest thereon, change the rate of accrual or
extend the time of payment in connection with Original Issue Discount, reduce
the principal amount at maturity thereof, reduce any amount payable on
redemption thereof, change the obligation of the Company to make redemption of
any Note upon the happening of any Fundamental Change as referred to below,
impair or affect the right of any Noteholder to institute suit for the payment
thereof, change the currency in which the Notes and other amounts in respect
thereof are payable, modify the provisions of the Indenture with respect to the
subordination of the Notes in a manner adverse to the Noteholders, or impair the
right to convert the Notes into Common Stock subject to the terms set forth in
the Indenture, including Section 15.06,
6
without the consent of the holder of each Note so affected or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Notes then outstanding. It is also provided in the Indenture that, prior to
any declaration accelerating the maturity of the Notes, the holders of a
majority in aggregate principal amount at maturity of the Notes at the time
outstanding may on behalf of the holders of all of the Notes waive any past
default or Event of Default under the Indenture and its consequences except a
default in the payment of principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption
Price or interest, if any, in respect of any of the Notes or a failure by the
Company to convert any Notes into Common Stock of the Company. Any such
consent or waiver by the holder of this Note (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Note and any Notes which may be issued in
exchange or substitution herefor, irrespective of whether or not any notation
thereof is made upon this Note or Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney in fact for such purpose.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and interest, if any, in respect of this Note at the place, at
the respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months. Accrual of Original Issue Discount shall be calculated
on the basis of a 360-day year of twelve 30-day months, compounded semiannually.
7
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount at maturity and any multiple thereof.
At the office or agency of the Company referred to on the face hereof, and in
the manner and subject to the limitations provided in the Indenture, but without
payment of any service charge, Notes may be exchanged for a like aggregate
principal amount at maturity of Notes of other authorized denominations.
The Company may not redeem the Notes prior to November 17, 1996. On or
after that date, the Company may, at its option, redeem the Notes as a whole, or
from time to time in part, on any date prior to maturity, upon mailing a notice
of such redemption not less than thirty nor more than sixty days before the date
fixed for redemption to the holders of Notes at their last registered addresses,
all as provided in the Indenture, at the following optional Redemption Prices
per $1,000 principal amount at maturity (which prices reflect accrued Original
Issue Discount calculated to each such date), together in each case with accrued
interest to the date fixed for redemption. The Redemption Price of a Note
redeemed between such dates would include an additional amount reflecting the
additional Original Issue Discount accrued since the next preceding date in the
table to the actual Redemption Date.
(1) (2) (3)
Accrued
Original Redemption
Note Issue Price
Redemption Date Issue Price Discount (1) + (2)
- --------------- ----------- -------- ----------
November 17, 1996 $ 845.35 $ 60.43 $905.78
November 17, 1997 845.35 82.44 927.79
November 17, 1998 845.35 105.45 950.80
November 17, 1999 845.35 129.50 974.85
At maturity 845.35 154.65 1,000.00
Notwithstanding the foregoing, if the date fixed for redemption is a May 17 or
November 17, then the interest payable on such date shall be paid to the holder
of record on the next preceding May 1 or November 1.
The Notes are not subject to redemption through the operation of any
sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs at any
time prior to November 17, 2000, each holder of Notes shall have the right,
at such holder's option, to require the Company to redeem all or any part of
such
8
holder's Notes on the date (the "Fundamental Change Redemption Date") (or if
such date is not a business day, the next succeeding business day) that is 30
days after the date of the Company's notice of such Fundamental Change. Such
redemption shall be made at a price (the "Fundamental Change Redemption Price")
equal to the Issue Price plus accrued Original Issue Discount to the Fundamental
Change Redemption Date; provided that, with respect to a Fundamental Change, if
the Applicable Price (as defined in the Indenture) is less than the Reference
Market Price (as defined in the Indenture), the Company shall redeem such Notes
at a price equal to the foregoing redemption price multiplied by the fraction
obtained by dividing the Applicable Price by the Reference Market Price. In each
case, the Company shall also pay accrued interest, if any, on such Notes to the
Fundamental Change Redemption Date; provided that if such Fundamental Change
Redemption Date is a May 17 or November 17, then the interest payable on such
date shall be paid to the holder of record of the Note on the next preceding
May 1 or November 1. The Company shall mail to all holders of record of the
Notes a notice of the occurrence of a Fundamental Change and of the
redemption right arising as a result thereof on or before the tenth day after
the occurrence of such Fundamental Change. For a Note to be so repaid at the
option of the holder, the Company must receive at the office or agency of the
Company maintained for that purpose in New York, New York such Note with the
form entitled "Option to Elect Redemption Upon a Fundamental Change" on the
reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the 30th day after the date of such notice (or if such
30th day is not a business day, the immediately preceding business day). All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Note for redemption shall be determined by the Company,
whose determination shall be final and binding.
Subject to the provisions of the Indenture, the holder hereof has the
right, at his option, at any time after 60 days following the latest date of
original issuance of the Notes through the close of business on November 17,
2000, or, as to all or any portion hereof called for redemption, prior to the
close of business on the business day immediately preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal which
is $1,000 principal amount at maturity or a multiple thereof, into that number
of fully paid and nonassessable shares of the Company's Common Stock, as said
shares shall be constituted at the date of conversion, obtained by dividing the
principal amount at maturity of this Note or portion thereof to be converted by
$1,000 and multiplying the result so obtained by 8.6481 (the "Conversion Rate")
or such Conversion Rate as adjusted from time to time as provided in the
Indenture, upon surrender of this Note, together with a
9
conversion notice as provided in the Indenture, to the Company at the office or
agency of the Company maintained for that purpose in New York, New York, and,
unless the shares issuable on conversion are to be issued in the same name as
this Note, duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. No adjustments in respect of accrued Original Issue
Discount, interest or dividends will be made upon any conversion; PROVIDED,
HOWEVER, that if this Note shall be surrendered for conversion during the period
from the close of business on any record date for the payment of interest to the
opening of business on the following interest payment date, this Note (unless it
or the portion being converted shall have been called for redemption on a date
in such period) must be accompanied by an amount, in New York Clearing House
funds, equal to the interest payable on such interest payment date on the
principal amount at maturity being converted; PROVIDED FURTHER, HOWEVER, that no
such payment shall be required if the Company exercises its right to redeem the
Notes on November 17, 1996. No fractional shares will be issued upon any
conversion, but an adjustment in cash will be made, as provided in the
Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for conversion on
or before the close of business on the business day immediately preceding the
date fixed for redemption, may be deemed to be purchased from the holder of such
Notes at an amount equal to the applicable Redemption Price, together with
accrued interest to the date fixed for redemption, by one or more investment
bankers or other purchasers who may agree with the Company to purchase such
Notes from the holders thereof and convert them into Common Stock of the Company
and to make payment for such Notes as aforesaid to the Trustee in trust for such
holders.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in New York, New York, a new Note or Notes of
authorized denominations for an equal aggregate principal amount at maturity
will be issued to the transferee in exchange herefor, subject to the limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company, the Trustee, any paying agent, any conversion agent and
any Note registrar may deem and treat the registered holder hereof as the
absolute owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or any Note registrar), for the purpose of receiving
payment hereof, or on account hereof, for
10
the conversion hereof and for all other purposes, and neither the Company nor
the Trustee nor any other paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price or interest, if any, in respect of this Note, or for any claim
based hereon or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture or any
indenture supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
11
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: Chiron Corporation
The undersigned registered holder of this Note hereby irrevocably
exercises the option to convert this Note, or portion hereof (which is $1,000
principal amount at maturity or a multiple thereof) below designated, into
shares of Common Stock of Chiron Corporation in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares issuable and
deliverable upon the conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted principal amount at
maturity hereof, be issued and delivered to the registered holder hereof unless
a different name has been indicated below. If shares or any portion of this Note
not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Note.
Dated:
-----------------------------
-----------------------------
Signature(s)
12
Fill in for registration of shares
if to be delivered, and Notes
if to be issued other than to
and in the name of the
registered holder:
- -----------------------------------
(Name)
- -----------------------------------
(Street Address)
- -----------------------------------
(City, State and zip code)
Please print name and address
Principal amount at maturity to be
converted (if less than all):
$______,000
--------------------------------------
Social Security or Other
Taxpayer Identification Number
13
[FORM OF ASSIGNMENT]
For value received _______________________ hereby sell(s), assign(s)
and transfer(s) unto _______________________________
(Please insert social security or other
taxpayer identification number of assignee.)
the within Note and hereby irrevocably constitutes and appoints ______________
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
In connection with any transfer of the within Note occurring within three years
of the original issuance of such Note, the undersigned confirms that such Note
is being transferred:
/ / To Chiron Corporation or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
14
/ / The transferee is an Affiliate of the Company.
Dated:
---------------------------
----------------------------------
Signature(s)
Signatures must be guaranteed by
a commercial bank or trust company
or a member firm of a major stock
exchange.
- -----------------------------------
Signature Guarantee
15
[FORM OF OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE]
To: Chiron Corporation
The undersigned registered holder of this Note hereby acknowledges
receipt of a notice from Chiron Corporation (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests
and instructs the Company to redeem this Note, or portion hereof (which is
$1,000 principal amount at maturity or a multiple thereof) below designated,
in accordance with the terms of the Indenture referred to in this Note,
together with accrued interest to such date, to the registered holder hereof.
Principal amount at maturity to be
converted (if less than all):
$______,000
Dated:
----------------------------
---------------------------------
Signature(s)
---------------------------------
Social Security or Other
Taxpayer Identification Number
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.
16
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Security
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Principal Amount of
Securities by which
this Global Security
Is To Be Reduced or
Increased, and Remaining Principal
Reason for Reduction Amount of this Notation
Date or Increase Global Security Made by
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
- -------- -------------------- ------------------- ---------------
- -------------------------------------------------------------------------------
17
AND WHEREAS, all acts and things necessary to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee, as in
this Indenture provided, the valid, binding and legal obligations of the
Company, and to constitute these presents a valid agreement according to its
terms, have been done and performed, and the execution of this Indenture and the
issue hereunder of the Notes have in all respects been duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. The
words "HEREIN", "HEREOF" and "HEREUNDER" and words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
AFFILIATE: The term "Affiliate" with respect to any specified Person
means any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
APPLICABLE PRICE: The term "Applicable Price" shall mean (i) in the
event of a Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by the holder of one share of
Common Stock and
18
(ii) in the event of any other Fundamental Change, the average of the last
reported sale price for the Common Stock (determined as set forth in subsection
(f) of Section 15.05) during the ten Trading Days (as defined in subsection (f)
of Section 15.05) prior to the record date for the determination of the holders
of Common Stock entitled to receive cash, securities, property or other assets
in connection with such Fundamental Change, or, if there is no such record date,
the date upon which the holders of Common Stock shall have the right to receive
such cash, securities, property or other assets in connection with the
Fundamental Change.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board
of Directors of the Company or a committee of such Board duly authorized to act
for it hereunder.
COMMON STOCK: The term "Common Stock" shall mean any stock of any
class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to
redemption by the Company. Subject to the provisions of Section 15.06,
however, shares issuable on conversion of Notes shall include only shares of
Common Stock, $.01 par value per share (which is the class designated as
Common Stock of the Company at the date of this Indenture), or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which are not subject to redemption by the
Company; PROVIDED that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion to which the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
COMPANY: The term "Company" shall mean Chiron Corporation, a Delaware
corporation, and subject to the provisions of Article Twelve shall include its
successors and assigns.
CONVERSION RATE: The term "Conversion Rate" shall have the meaning
specified in Section 15.04.
DEPOSITARY: The term "Depositary" means, with respect to the Notes
issuable or issued in whole or in part in global form, the person specified
in Section 2.05 as the Depositary with respect to the Notes, until a
successor shall have been appointed and become such pursuant to the applicable
19
provisions of this Indenture, and thereafter, "Depositary" shall mean or include
such successor.
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 7.01, continued for the period of time, if any, and after
the giving of the notice, if any, therein designated.
FUNDAMENTAL CHANGE: The term "Fundamental Change" means the occurrence
of any transaction or event in connection with which all or substantially all
the Common Stock shall be exchanged for, converted into, acquired for or
constitute the right to receive consideration which is not all or substantially
all common stock listed (or, upon consummation of such transaction or event,
which will be listed) on a United States national securities exchange or
approved for quotation in the NASDAQ System or any similar United States system
of automated dissemination of quotations of securities prices (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise).
FUNDAMENTAL CHANGE REDEMPTION DATE: The term "Fundamental Change
Redemption Date" has the meaning ascribed to it in Section 16.01(a).
INDENTURE: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
ISSUE PRICE: The term "Issue Price" shall mean, in connection with
the original issuance of such Note (including any Predecessor Note), the initial
issue price at which the Note is sold as set forth on the face of the Note.
NASDAQ SYSTEM: The term "NASDAQ System" shall mean the electronic
inter-dealer quotation system operated by NASDAQ, Inc., a subsidiary of the
National Association of Securities Dealers, Inc.
NOTE OR NOTES: The terms "Note" or "Notes" shall mean any Note or
Notes, as the case may be, authenticated and delivered under this Indenture.
NOTEHOLDER: The terms "Noteholder" or "holder of Notes", or other
similar terms, shall mean any person in whose name at the time a particular Note
is registered on the books of the Company kept for that purpose in accordance
with the terms hereof.
OFFICERS' CERTIFICATE: The term "Officers' Certificate", when used
with respect to the Company, shall
20
mean a certificate signed both (a) by its Chairman of the Board of Directors, or
any Vice-Chairman of the Board of Directors, or its President or any Vice
President (whether or not designated by a number or numbers or a word or words
added before or after the title "Vice President") and (b) by its Treasurer, or
Controller, or Secretary or any Assistant Secretary.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or counsel
to the Company or other counsel acceptable to the Trustee.
ORIGINAL ISSUE DISCOUNT: The term "Original Issue Discount" of any
Note means the difference between the Issue Price and the principal amount at
maturity of the Note as set forth on the face of the Note. For purposes of
this Indenture and the Notes, accrual of Original Issue Discount shall be
calculated on the basis of a 360-day year of twelve 30-day months, compounded
semi-annually.
OUTSTANDING: The term "outstanding", when used with reference to
Notes, shall, subject to the provisions of Section 9.04, mean, as of any
particular time, all Notes authenticated and delivered by the Trustee under this
Indenture, except
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the payment or redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent), PROVIDED that if such Notes are to be
redeemed prior to the maturity thereof, notice of such redemption shall
have been given as in Article Three provided, or provision satisfactory to
the Trustee shall have been made for giving such notice;
(c) Notes paid or Notes in lieu of or in substitution for which other
Notes shall have been authenticated and delivered pursuant to the terms of
Section 2.06 unless proof satisfactory to the Trustee is presented that any
such Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article Fifteen
hereof and Notes not deemed outstanding pursuant to Section 3.02.
21
PERSON: The term "Person" shall mean a corporation, an association, a
partnership, an organization, an individual, a government or a political
subdivision thereof or a governmental agency, and shall include any successor
(by merger or otherwise) of such entity.
PORTAL MARKET: The term "PORTAL" Market shall mean the Private
Offerings, Resales and Trading through Automated Linkages Market operated by the
National Association of Securities Dealers Inc. or any successor thereto.
PREDECESSOR NOTE: The term "Predecessor Note" of any particular Note
shall mean every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.06 in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note.
PRINCIPAL OFFICE OF THE TRUSTEE: The term "principal office of the
Trustee", or other similar term, shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office is, at the date as of which this Indenture is dated,
located at The First National Bank of Boston, Blue Hills Office Park, 150 Royall
Street, Canton, Massachusetts 02021; Attn: Corporate Trust Division.
QIB: The term "QIB" shall mean a "qualified institutional buyer as
defined in Rule 144A.
REDEMPTION PRICE: The term "Redemption Price" means the applicable
Redemption Price as set forth in the notice, including any applicable additional
Original Issue Discount referred to therein.
REFERENCE MARKET PRICE: The term "Reference Market Price" shall
initially mean $51.50 and in the event of any adjustment to the Conversion Rate
pursuant to subsection (a), (b) or (c) of Section 15.05, the Reference Market
Price shall also be adjusted so that the Reference Market Price after giving
effect to any such adjustment shall equal the Reference Market Price immediately
prior to such adjustment multiplied by a fraction, the numerator of which is the
Conversion Rate immediately prior to such adjustment and the denominator of
which is the Conversion Rate after such adjustment.
RESPONSIBLE OFFICER: The term "Responsible Officer", when used with
respect to the Trustee, shall mean any officer assigned by the Trustee to
administer its corporate trust matters.
22
RESTRICTED NOTE: The term "Restricted Note" means any Note that bears
or is required to bear the legend set forth in Section 2.05(d).
RULE 144A: The term "Rule 144A" shall mean Rule 144A as promulgated
under the Securities Act.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness" shall mean the
principal of, premium, if any, interest on, and any other payment due pursuant
to any of the following, whether outstanding at the date hereof or hereafter
incurred or created:
(a) all indebtedness of the Company for money borrowed (including any
indebtedness secured by a mortgage, conditional sales contract or other
lien which is (i) given to secure all or part of the purchase price of
property subject thereto, whether given to the vendor of such property or
to another or (ii) existing on property at the time of acquisition
thereof);
(b) all indebtedness of the Company evidenced by notes, debentures,
bonds or other securities;
(c) all indebtedness or other obligations of the Company with respect
to interest rate and currency swap agreements, cap, floor and collar
agreements, currency spot and forward contracts and other similar
agreements and arrangements;
(d) all lease obligations of the Company which are capitalized on the
books of the Company in accordance with generally accepted accounting
principles;
(e) all indebtedness of others of the kinds described in any of the
preceding clauses (a), (b) or (c) and all lease obligations of others of
the kind described in the preceding clause (d) assumed by or guaranteed in
any manner by the Company or in effect guaranteed by the Company through an
agreement to purchase, contingent or otherwise; and
(f) all renewals, extensions or refundings of indebtedness of the
kinds described in any of the preceding clauses (a), (b), (c) or (e) and
all renewals or extensions of lease obligations of the kinds described in
any of the preceding clauses (c), (d) or (e);
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is subordinate to any other
23
indebtedness of the Company or is not superior in right of payment to, or is
PARI PASSU with, the Notes. Notwithstanding the foregoing, Senior Indebtedness
shall not include (i) any indebtedness or lease obligation of any kind of the
Company to any subsidiary of the Company, a majority of the voting stock of
which is owned by the Company and (ii) indebtedness for trade payables or
constituting the deferred purchase price of assets or services incurred in the
ordinary course of business.
TRIGGER EVENT: The term "Trigger Event" is defined in Section
15.05(g).
TRUSTEE: The term "Trustee" shall mean The First National Bank of
Boston and, subject to the provisions of Article Eight hereof, shall also
include its successors and assigns as Trustee hereunder.
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.01. DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes shall
be designated as "1.90% Convertible Subordinated Notes due 2000". Notes not to
exceed the aggregate principal amount at maturity of $243,800,000 (except
pursuant to Sections 2.05, 2.06, 3.03, 15.02 and 16.01) upon the execution of
this Indenture, or from time to time thereafter, may be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the Company,
signed both (a) by its Chairman of the Board of Directors, or any Vice-Chairman
of the Board of Directors, or its President or any Vice President (whether or
not designated by a number or numbers or a word or words added before or after
the title "Vice President") and (b) by its Treasurer, or Controller, or
Secretary or any Assistant Secretary without any further action by the Company
hereunder.
SECTION 2.02. FORM OF NOTES. The Notes and the Trustee's
certificate of authentication to be borne by the Notes shall be substantially
in the form as in this Indenture above recited. Any of the Notes may have
imprinted thereon such legends or endorsements as the officers executing the
same may approve (execution thereof to be conclusive evidence of such
approval) and as are not inconsistent with the provisions of this Indenture,
or as may be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Notes may be listed or any trading system in which the Notes may be
admitted, or to conform to usage.
24
SECTION 2.03. DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST.
The Notes shall be issuable in registered form without coupons in denominations
of $1,000 principal amount at maturity and any multiple thereof. Every Note
shall be dated the date of its authentication, shall bear interest from the
applicable date and shall be payable on the dates specified on the face of the
form of Note recited above.
The person in whose name any Note (or its Predecessor Note) is
registered at the close of business on any record date with respect to any
interest payment date shall be entitled to receive the interest payable on such
interest payment date notwithstanding the cancellation of such Note upon any
transfer or exchange subsequent to the record date and prior to such interest
payment date. As provided in Section 15.02, and subject to the exception
contained therein, interest shall not be payable to such person in the case of
any Note or Notes, or portion thereof, which have been called for redemption and
which are converted on a date subsequent to such record date and prior to such
interest payment date. Interest may, at the option of the Company, be paid by
check mailed to the address of such person on the registry kept for such
purposes; PROVIDED that with respect to any holder of Notes with an aggregate
principal amount at maturity equal to or in excess of $10 million, at the
request of such holder in writing the Company shall pay interest on such
holder's Notes by wire transfer in immediately available funds. The term "record
date" with respect to any interest payment date shall mean the May 1 or November
1 preceding said May 17 or November 17. Interest on the Notes shall be computed
on the basis of a 360-day year of twelve 30-day months. Accrual of Original
Issue Discount shall be calculated on the basis of a 360-day year of twelve
30-day months, compounded semiannually.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any said May 17 or November 17 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Noteholder on
the relevant record date by virtue of his having been such Noteholder; and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which date shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment (which shall be not less
25
than 25 days after the receipt by the Trustee of such notice, unless the
Trustee shall consent to an earlier date), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a special record date
for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the special record date therefor to be mailed, first-class postage prepaid
to each Noteholder at his address as it appears in the Note register, not
less than 10 days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Notes (or their respective Predecessor Notes) are
registered at the close of business on such special record date and shall
no longer be payable.
SECTION 2.04. EXECUTION OF NOTES. The Notes shall be signed in the
name and on behalf of the Company by the facsimile signature of its President or
its Chief Executive Officer and attested by the facsimile signature of its
Secretary or its Chief Financial Officer (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Notes as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, manually executed by the Trustee, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Note executed by the Company shall be
conclusive evidence that the Note so authenticated has been duly authenticated
and delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be
26
signed on behalf of the Company by such persons as, at the actual date of the
execution of such Note, shall be the proper officers of the Company, although at
the date of the execution of this Indenture any such person was not such an
officer.
SECTION 2.05. EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY. (a) The Company shall keep at its
principal office, or shall cause to be kept, at one of the offices or agencies
maintained pursuant to Section 5.02, a register (the "Register") in which,
subject to such reasonable regulations as it may prescribe, Notes shall be
registered and the transfer of Notes shall be registered as in this Article Two
provided. Such Register shall be in written form or in any other form capable of
being converted into written form within a reasonable time. At all reasonable
times such Register shall be open for inspection by the Trustee. Upon due
presentment for registration of transfer of any Note at any office or agency
maintained by the Company pursuant to Section 5.02, the Company shall execute
and register and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Note or Notes for an equal aggregate principal
amount at maturity.
Upon surrender for registration of transfer of any Note to the Trustee
and satisfaction of the requirements for such transfer set forth in this Section
2.05, the Company shall execute, and the Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new Notes
of any authorized denominations and of a like aggregate principal amount at
maturity and bearing such restrictive legends as may be required by this
Indenture.
Notes may be exchanged for a like aggregate principal amount at
maturity of Notes of other authorized denominations. Notes to be exchanged shall
be surrendered at any office or agency to be maintained by the Company pursuant
to Section 5.02 and the Company shall execute and register and the Trustee shall
authenticate and deliver in exchange therefor the Note or Notes which the
Noteholder making the exchange shall be entitled to receive, bearing
registration numbers not contemporaneously outstanding.
All Notes presented for registration of transfer or for exchange,
redemption, conversion or payment shall (if so required by the Company or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee duly
executed by, the holder or his attorney duly authorized in writing.
No service charge shall be charged to the Noteholder for any exchange
or registration of transfer of Notes, but the Company may require payment of a
sum sufficient to cover any
27
tax or other governmental charge that may be imposed in connection therewith.
Neither the Company nor the Trustee shall be required to exchange or
register a transfer of (a) any Notes for a period of 15 days next preceding any
selection of Notes to be redeemed or (b) any Notes or portions thereof selected
or called for redemption or (c) any Notes or portion thereof surrendered for
conversion or (d) any Notes or portion thereof surrendered for redemption
pursuant to Article Sixteen.
All Notes issued upon any transfer or exchange of Notes shall be valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture as the Notes surrendered upon such exchange or
transfer.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary (as defined below), or unless otherwise required by law, all
Notes to be traded on the PORTAL Market may be represented by a Note in global
form registered in the name of the Depositary or the nominee of the Depositary.
The transfer and exchange of beneficial interests in such Note in global form
shall be effected through the Depositary, in accordance with this Indenture
(including the restrictions on transfer set forth herein) and the procedures of
the Depositary therefor.
At any time at the request of the beneficial holder of an interest in
a Note in global form, such beneficial holder shall be entitled to obtain a
definitive Note upon written request to the Trustee in accordance with the
procedures of the Depositary for the issuance thereof. Upon receipt of any such
request, the Trustee will cause, in accordance with the standing instructions
and procedures of the Depositary, the aggregate principal amount at maturity of
the Note in global form to be reduced and, following such reduction, the Company
will execute and the Trustee will authenticate and deliver to such beneficial
holder (or its nominee) a Note or Notes in the appropriate aggregate principal
amount at maturity of the name of such beneficial holder (or its nominee) and
bearing such restrictive legends as may be required by this Indenture.
Any transfer of a beneficial interest in a Note in global form which
cannot be effected through book-entry settlement must be effected by the
delivery to the transferee (or its nominee) of a definitive Note or Notes
registered in the name of the transferee (or its nominee) on the books
maintained by the Trustee. With respect to any such transfer, the Trustee will
cause, in accordance with the standing instructions and procedures of the
Depositary, the aggregate principal amount at maturity of the Note in global
form to be
28
reduced and, following such reduction, the Company will execute and the Trustee
will authenticate and deliver to the transferee (or such transferee's nominee,
as the case may be), a Note or Notes in the appropriate aggregate principal
amount at maturity in the name of such transferee (or its nominee) and bearing
such restrictive legends as may be required by this Indenture.
(c) So long as the Notes are eligible for book entry settlement, or
unless otherwise required by law, upon any transfer of a definitive Note to a
QIB in accordance with Rule 144A, unless otherwise requested by the transferor,
and upon receipt of the definitive Note or Notes being so transferred, together
with a certification from the transferor that the transferee is a QIB (or other
evidence satisfactory to the Trustee), the Trustee shall make an endorsement on
the Note in global form to reflect an increase in the aggregate principal amount
at maturity of the Notes represented by the Note in global form, the Trustee
shall cancel such definitive Note or Notes in accordance with the standing
instructions and procedures of the Depositary, the aggregate principal amount at
maturity of Notes represented by the Note in global form to be increased
accordingly; PROVIDED that no definitive Note, or portion thereof, in respect of
which the Company or an Affiliate of the Company held any beneficial interest
shall be included in such Note in global form until such definitive Note is
freely tradable in accordance with Rule 144(k); PROVIDED FURTHER that the
Trustee shall issue Notes in definitive form upon any transfer of a beneficial
interest in the Note in global form to the Company or any Affiliate of the
Company.
Any Note in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradeable on the PORTAL Market or as may be required for the Notes to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange upon
which the Notes may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Notes are subject.
(d) Every Restricted Note shall be subject to the restrictions on
transfer provided in the legend required to be borne by each Restricted Note
pursuant to this Section 2.05, unless such restrictions on transfer shall be
waived by the written consent of the Company, and the holder of each Restricted
Note, by such Noteholder's acceptance thereof,
29
agrees to be bound by such restrictions on transfer. As used in this section
2.05(d) and in Section 2.05(e), the terms "transfer" encompasses any sale,
pledge, transfer or other disposition of any Restricted Note.
Until three years after the original issuance date of any Note, any
certificate evidencing such Note (and all securities issued in exchange or
substitution therefor, other than Common Stock, if any, issued upon conversion
thereof that shall bear the legend set forth in Section 2.05(e), if applicable)
shall bear a legend in substantially the following form, unless otherwise agreed
by the Company (with written notice thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER
THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE EXCEPT (A) TO CHIRON CORPORATION OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED
TO THE FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE, A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY WITHIN THREE YEARS AFTER THE ORIGINAL
30
ISSUANCE OF SUCH NOTE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER
WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE, SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THREE YEARS FROM
THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms, may upon surrender of such Note for exchange to the Note registrar
in accordance with the provisions of this Section 2.05, be exchanged for a new
Note or Notes, of like tenor and aggregate principal amount at maturity, which
shall not bear the restrictive legend required by this Section 2.05(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.05(d)), a Note in global form may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Notes in global form. Initially, the global
Note shall be issued to the Depositary, registered in the name of Cede & Co., as
the nominee of the Depositary, and deposited with the custodian for Cede & Co.
If at any time the Depositary for the Note in global form notifies
the Company that it is unwilling or unable to continue as Depositary for such
Note, the Company may appoint a successor Depositary with respect to such Note.
If a successor Depositary for the Note is not appointed by the Company within
90 days after the Company receives such notice, the Company will execute, and
the Trustee, upon receipt of an Officers Certificate for authentication and
delivery of
31
Notes, will authenticate and deliver Notes in definitive form, in an aggregate
principal amount at maturity equal to the principal amount at maturity of the
Note in global form, in exchange for the such Note in the global form.
If a definitive Note is issued in exchange for any portion of a Note
in global form after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such Note, but will be
payable on such interest payment date only to the person to whom interest in
respect of such portion of such Note in global form is payable in accordance
with the provisions of this Indenture.
Definitive Notes issued in exchange for all or a part of a Note in
global form pursuant to this Section 2.05 shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such
definitive Notes to the person in whose names such definitive Notes are so
registered.
At such time as all interests in a Note in global form have been
redeemed, converted, repurchased or canceled, such Note in global form shall be
canceled by the Trustee in accordance with standing procedures and instructions
of the Depositary. At any time prior to such cancellation, if any interest in a
global Note is exchanged for definitive Notes, redeemed, converted, canceled, or
transferred to a transferee who receives definitive Notes therefor or any
definitive Note is exchanged or transferred for part of a Note in global form,
the principal amount at maturity of such Note in global form shall, in
accordance with the standing procedures and instructions of the Depositary be
reduced or increased, as the case may be, and an endorsement shall be made on
such Note in global form by the Trustee to reflect such reduction or increase.
(e) Until three years after the original issuance date of any Note,
any stock certificate representing Common Stock issued upon conversion of such
Note shall bear a legend in substantially the following form, unless otherwise
agreed by the Company (with written notice thereof to the Trustee):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT
AS SET FORTH IN THE FOLLOWING
32
SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF THREE YEARS
AFTER THE ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE
COMMON STOCK EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO CHIRON
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO CHEMICAL TRUST COMPANY OF CALIFORNIA, AS TRANSFER AGENT, A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT), (D) OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (2) PRIOR TO SUCH TRANSFER, IT WILL FURNISH
TO CHEMICAL TRUST COMPANY OF CALIFORNIA, AS TRANSFER AGENT, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON
TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED
OR UPON THE EARLIER SATISFACTION OF CHEMICAL TRUST COMPANY OF CALIFORNIA,
AS TRANSFER AGENT, THAT THE COMMON STOCK HAS BEEN OR IS BEING OFFERED AND
SOLD IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
(f) Any certificate evidencing a Note that has been transferred to an
Affiliate of the Company within three years after the original issuance date of
the Note, as evidenced by a notation on the Assignment Form for such transfer or
in the representation letter delivered in respect thereof, shall, until three
years after the last date on which the Company or any Affiliate of the Company
was an owner of such Note, bear a legend in substantially the following form,
unless otherwise
33
agreed by the Company (with written notice thereof to the Trustee);
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE
UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO CHIRON CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) IN A TRANSACTION REGISTERED UNDER THE SECURITIES
ACT OR (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) AND (2) THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFER IS
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any stock certificate representing Common Stock issued upon conversion of such
Note shall also bear a legend in substantially the form indicated above, unless
otherwise agreed by the Company (with written notice thereof to the Trustee).
SECTION 2.06. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any
temporary or definitive Note shall become mutilated or be apparently destroyed,
lost or stolen, the Company in its discretion may execute, and upon its request
the Trustee shall authenticate and deliver, a new Note, bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Note, or in lieu of and in substitution for the Note so apparently destroyed,
lost or stolen. In every case the applicant for a substituted Note shall furnish
to the Company and to the Trustee such security or indemnity as may be required
by them to save each of them harmless, and, in every case of destruction, loss
or
34
theft, the applicant shall also furnish to the Company and to the Trustee
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
The Trustee may authenticate any such substituted Note and deliver the
same upon the receipt of such security or indemnity as the Trustee and the
Company may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or is about to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note) if the applicant for such payment or conversion shall furnish to
the Company and to the Trustee such security or indemnity as may be required by
them to save each of them harmless and, in case of destruction, loss or theft,
evidence satisfactory to the Company and the Trustee of the destruction, loss or
theft of such Note and of the ownership thereof.
Every substituted Note issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Note is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the apparently destroyed, lost or stolen Note shall be found at any time,
and shall be entitled to all the benefits of (but shall be subject to all the
limitations set forth in) this Indenture equally and proportionately with any
and all other Notes duly issued hereunder. To the extent permitted by law, all
Notes shall be held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Notes and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment or
conversion of negotiable instruments or other securities without their
surrender.
SECTION 2.07. TEMPORARY NOTES. Pending the preparation of definitive
Notes, the Company may execute and the Trustee shall authenticate and deliver
temporary Notes (printed or lithographed). Temporary Notes shall be issuable in
any authorized denomination, and substantially in the form of the definitive
Notes but with such omissions, insertions and variations as may be appropriate
for temporary Notes, all as may be determined by the Company. Every such
temporary Note shall be executed by the Company and authenticated by the
35
Trustee upon the same conditions and in substantially the same manner, and with
the same effect, as the definitive Notes. Without unreasonable delay the Company
will execute and deliver to the Trustee definitive Notes and thereupon any or
all temporary Notes may be surrendered in exchange therefor, at each office or
agency maintained by the Company pursuant to Section 5.02 and the Trustee shall
authenticate and deliver in exchange for such temporary Notes an equal aggregate
principal amount at maturity of definitive Notes. Such exchange shall be made by
the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes authenticated and delivered
hereunder.
SECTION 2.08. CANCELLATION OF NOTES PAID, ETC. All Notes surrendered
for the purpose of payment, redemption, conversion, exchange or registration of
transfer, shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall destroy canceled
Notes (unless the Company directs it to do otherwise) and shall deliver a
certificate of such destruction to the Company. If the Company shall acquire any
of the Notes, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Notes unless and until the same are
delivered to the Trustee for cancellation.
ARTICLE THREE
REDEMPTION OF NOTES
SECTION 3.01. REDEMPTION PRICES. The Company may not redeem the Notes
prior to November 17, 1996. On or after that date, the Company may, at its
option, redeem all or from time to time any part of the Notes on any date prior
to maturity, upon notice as set forth in Section 3.02, and at the optional
Redemption Prices set forth in the form of Note hereinabove recited, together
with interest, if any, to the date fixed for redemption.
36
SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF NOTES. In case the
Company shall desire to exercise the right to redeem all or, as the case may
be, any part of the Notes pursuant to Section 3.01 for redemption and, it or,
at its request, the Trustee in the name of and at the expense of the Company,
shall mail or cause to be mailed a notice of such redemption at least 30 and
not more than 60 days prior to the date fixed for redemption to the holders
of Notes so to be redeemed as a whole or in part at their last addresses as
the same appear on the registry books of the Company. Such mailing shall be
by first class mail. The notice if mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Note designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note.
Each such notice of redemption shall specify the principal amount at
maturity of each Note to be redeemed, the date fixed for redemption, the
Redemption Price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest and Original Issue Discount accrued to the date fixed for
redemption will be paid as specified in said notice, and that on and after said
date interest and Original Issue Discount thereon or on the portions thereof to
be redeemed will cease to accrue. Such notice shall also state the current
Conversion Rate and the date on which the right to convert such Notes or
portions thereof into Common Stock will expire. If fewer than all the Notes are
to be redeemed, the notice of redemption shall identify the Notes to be
redeemed. In case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount at maturity thereof
to be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Note, a new Note or Notes in principal amount at maturity
equal to the unredeemed portion thereof will be issued.
No later than the business day prior to the redemption date specified
in the notice of redemption given as provided in this Section, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.04) an amount of money sufficient to redeem on the
redemption date all the Notes so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
Redemption Price, together with accrued interest to the date fixed for
redemption. If any Note called for redemption is converted pursuant hereto, any
money deposited
37
with the Trustee or any paying agent or so segregated and held in trust for the
redemption of such Note shall be paid to the Company upon its request, or, if
then held by the Company shall be discharged from such trust. If fewer than all
the Notes are to be redeemed, the Company will give the Trustee written notice
not less than 45 days prior to the redemption date as to the aggregate principal
amount at maturity of Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall
select, in such manner as the Trustee shall deem equitable and fair, the Notes
or portions thereof (in multiples of $1,000 principal amount at maturity) to be
redeemed. If any Note selected for partial redemption is converted in part after
such selection, the converted portion of such Note shall be deemed (so far as
may be) to be the portion to be selected for redemption. The Notes (or portions
thereof) so selected shall be deemed duly selected for redemption for all
purposes hereof, notwithstanding that any such Note is converted as a whole or
in part before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and the
Trustee may treat as outstanding any Notes surrendered for conversion during the
period of 15 days next preceding the mailing of a notice of redemption and need
not treat as outstanding any Note authenticated and delivered during such period
in exchange for the unconverted portion of any Note converted in part during
such period.
SECTION 3.03. PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Notes or portions of Notes with
respect to which such notice has been given shall, unless theretofore converted
into Common Stock pursuant to the terms hereof, become due and payable on the
date and at the place or places stated in such notice at the applicable
Redemption Price, together with interest accrued to the date fixed for
redemption, and on and after said date (unless the Company shall default in the
payment of such Notes at the Redemption Price, together with interest accrued to
said date) Original Issue Discount and interest on the Notes or portions of
Notes so called for redemption shall cease to accrue and such Notes shall cease
after the date fixed for redemption to be convertible into Common Stock and,
except as provided in Sections 8.05 and 13.04, to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no right in
respect of such Notes except the right to receive the Redemption Price thereof
and unpaid interest to the date fixed for redemption. On presentation and
surrender of such Notes at a place of payment in said notice specified, the said
Notes or the specified portions thereof shall be paid and redeemed by the
Company at the applicable Redemption Price, together
38
with interest accrued thereon to the date fixed for redemption; PROVIDED that
any semi-annual payment of interest becoming due on the date fixed for
redemption shall be payable to the holders of such Notes registered as such on
the relevant record date subject to the terms and provisions of Section 2.03
hereof.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount at maturity equal to the unredeemed portion of the Note so
presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of optional redemption during the continuance of a default in
payment of principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price or interest, if
any, in respect of the Notes or of any Event of Default. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
Redemption Price and, to the extent legally permitted, interest, if any, in
respect thereof shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate borne by the Note (giving effect to
accrual of Original Issue Discount) and such Note shall remain convertible into
Common Stock until the Redemption Price shall have been paid or duly provided
for.
SECTION 3.04. NO SINKING FUND. The Notes shall not be entitled to the
benefit of any sinking fund.
SECTION 3.05. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bankers or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the close of business on the date fixed
for redemption, an amount not less than the applicable Redemption Price,
together with interest accrued to the date fixed for redemption, of such Notes.
Notwithstanding anything to the contrary contained in this Article Three, the
obligation of the Company to pay the Redemption Price of such Notes, together
with interest accrued to the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and
39
(notwithstanding anything to the contrary contained in Article Fifteen)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption, subject to payment of
the above amount as aforesaid. At the direction of the Company, the Trustee
shall hold and dispose of any such amount paid to it in the same manner as it
would monies deposited with it by the Company for the redemption of Notes.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Notes shall increase
or otherwise affect any of the powers, duties, responsibilities or obligations
of the Trustee as set forth in this Indenture, and the Company agrees to
indemnify the Trustee from, and hold it harmless against, any loss, liability or
expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Notes between the Company and such purchasers to
which the Trustee has not consented in writing, including the costs and expenses
incurred by the Trustee in the defense of any claim or liability arising out of
or in connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
ARTICLE FOUR
SUBORDINATION OF NOTES
SECTION 4.01. AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Notes issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article Four; and each Person holding any Note, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.
The payment of the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price
and interest, if any, in respect of all Notes issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article Four shall prevent the occurrence of any
default or Event of Default hereunder.
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SECTION 4.02. PAYMENTS TO NOTEHOLDERS. In the event and during the
continuation of any default in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness continuing beyond the period of
grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by the Company
with respect to the principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption Price or
interest, if any, in respect of the Notes, except payments made pursuant to
Article Thirteen hereof from monies deposited with the Trustee pursuant thereto
prior to the happening of such default.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full, or payment thereof provided for
in money in accordance with its terms, before any payment is made on account of
the principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or interest, if any, in
respect of the Notes (except payments made pursuant to Article Thirteen hereof
from monies deposited with the Trustee pursuant thereto prior to the happening
of such dissolution, winding-up, liquidation or reorganization); and upon any
such dissolution or winding-up or liquidation or reorganization any payment by
the Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Notes or
the Trustee would be entitled, except for the provisions of this Article Four,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Notes or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the holders of the Notes or to the Trustee.
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If, notwithstanding the foregoing, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, prohibited by the foregoing, shall be received by the Trustee or
the holders of the Notes before all Senior Indebtedness is paid in full, or
provision is made for such payment in money in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and
shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders
of such Senior Indebtedness.
For purposes of this Article Four, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Four with
respect to the Notes to the payment of all Senior Indebtedness which may at the
time be outstanding; PROVIDED that (i) the Senior Indebtedness is assumed by the
new corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of the Senior Indebtedness (other than
leases) and of leases which are assumed are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article Twelve hereof
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 4.02 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Twelve hereof. Nothing in this Section 4.02 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 8.06.
42
Notwithstanding anything in this Indenture to the contrary, neither
the issuance and delivery of junior securities upon conversion of the Notes in
accordance with Article Fifteen nor the payment of cash in lieu of fractional
shares of Common Stock in accordance with Section 15.03 shall be deemed to
constitute a payment or distribution on account of the principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price or
Fundamental Change Purchase Price or interest, if any, in respect of the Notes.
For the purposes of this paragraph, the term "junior securities" means (a)
shares of any stock of any class of the Company, (b) securities of the Company
which are subordinated in right of payment to all Senior Indebtedness which may
be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in this Article, and (c) any securities into which the
Notes become convertible pursuant to Section 15.06 which are securities of a
Person required to enter into a supplemental indenture pursuant to such section
(or Article Twelve) and are either (x) shares of any stock of any class of such
Person, or (y) securities of such Person which are subordinated in right of
payment to all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Notes are so subordinated as provided in this
Article. Nothing contained in this Article or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
right, which is absolute and unconditional, of the holder of any Note to convert
such Note in accordance with Article Fifteen.
SECTION 4.03. SUBROGATION OF NOTES. Subject to the payment in full of
all Senior Indebtedness, the rights of the holders of the Notes shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price and interest, if any, in respect of the Notes shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Notes or the Trustee would be entitled
except for the provisions of this Article Four, and no payment over pursuant to
the provisions of this Article Four, to or for the benefit of the holders of
Senior Indebtedness by holders of the Notes or the Trustee, shall, as between
the Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness. It is understood
43
that the provisions of this Article Four are and are intended solely for the
purpose of defining the relative rights of the holders of the Notes, on the one
hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article Four or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Notes, the obligation of the Company, which is absolute and unconditional, to
pay to the holders of the Notes the principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental Change Redemption
Price and interest, if any, in respect of the Notes as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Notes and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Note from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Four of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Four, the Trustee, subject to the provisions of Section 8.01,
and the holders of the Notes shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Four.
SECTION 4.04. AUTHORIZATION BY NOTEHOLDERS. Each holder of a Note by
his acceptance thereof authorizes and directs the Trustee in his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article Four and appoints the Trustee his attorney-in-fact for
any and all such purposes.
44
SECTION 4.05. NOTICE TO TRUSTEE. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to
the Company which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Notes pursuant to the provisions of this
Article Four. Notwithstanding the provisions of this Article Four or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Notes pursuant
to the provisions of this Article Four, unless and until a Responsible
Officer of the Trustee shall have received written notice thereof at the
Principal Office of the Trustee from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section
8.01, shall be entitled in all respects to assume that no such facts exist;
PROVIDED that if on a date not fewer than three business days prior to the
date upon which by the terms hereof any such monies may become payable for
any purpose (including, without limitation, the payment of the principal
amount at maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, Fundamental Change Redemption Price or interest, if any, in respect of
any Note) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 4.05, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing
shall prevent any payment by the Company or the Trustee to the Noteholders of
monies (A) in connection with a redemption of Notes if (i) notice of such
redemption has been given pursuant to Article Three or Section 13.01 hereof
prior to the receipt by the Trustee of written notice as aforesaid, and (ii)
such notice of redemption is given not earlier than 60 days before the
redemption date; and (B) in connection with a redemption of a Note pursuant to
Article Sixteen if, prior to the receipt by the Trustee of written notice as
aforesaid, the Company has given notice of a Fundamental Change.
The Trustee, subject to the provisions of Section 8.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. If
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in
45
any payment or distribution pursuant to this Article Four, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
Four, and if such evidence is not furnished the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 4.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee
in its individual capacity shall be entitled to all the rights set forth in this
Article Four in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Section or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Four, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.01, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Notes, the
Company or any other Person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Four or otherwise.
SECTION 4.07. NO IMPAIRMENT OF SUBORDINATION. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
46
ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and interest, if any, in
respect of each of the Notes at the places, at the respective times and in the
manner provided herein and in the Notes. Each installment of interest on the
Notes may be paid by mailing checks for the interest payable to or upon the
written order of the holders of Notes entitled thereto as they shall appear on
the registry books of the Company; PROVIDED that with respect to any holder of
Notes with an aggregate principal amount at maturity equal to or in excess of
$10 million, at the request of such holder in writing the Company shall pay
interest on such holder's Notes by wire transfer in immediately available funds.
SECTION 5.02. OFFICES FOR NOTICES AND PAYMENTS. ETC. So long as any
of the Notes remain outstanding, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where the Notes may be
presented for payment, and an office or agency where the Notes may be
presented for registration of transfer and for exchange and conversion as
provided for in this Indenture and an office or agency where notices and
demands to or upon the Company in respect of the Notes or of this Indenture
may be served. The Company will give to the Trustee written notice of the
location of each such office or agency and of any change of location thereof.
If the Company shall fail to maintain any such office or agency or shall fail
to give such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the
principal office of the Trustee and the Company hereby appoints the Trustee
at the principal office of the Trustee as its agent to receive all such
presentations, demands and notices.
SECTION 5.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.09, a Trustee, so that there
shall at all times be a Trustee hereunder.
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SECTION 5.04. PROVISION AS TO PAYING AGENT. (a) If the Company shall
appoint a paying agent other than the Trustee, it will cause such paying agent
to execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for the
payment of the principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption Price or
interest, if any, in respect of the Notes (whether such sums have been paid
to it by the Company or by any other obligor on the Notes) in trust for the
benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or interest, if any,
in respect of the Notes when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it will forthwith pay to the Trustee all sums
so held in trust.
The Company shall, before each due date of the principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price or interest, if any, in respect of the
Notes, deposit with the paying agent a sum sufficient to pay such amounts so
becoming due, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of any failure to take such action.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price
or interest, if any, in respect of the Notes, set aside, segregate and hold in
trust for the benefit of the holders of the Notes a sum sufficient to pay such
amounts so becoming due and will notify the Trustee of any failure to take such
action and of any failure by the Company (or by any other obligor under the
Notes) to make any payment of the principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental Change Redemption
Price or interest, if any, in respect of the Notes when the same shall become
due and payable.
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(c) Anything in this Section 5.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such money.
(d) Anything in this Section 5.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.04 is subject
to Sections 13.03 and 13.04.
ARTICLE SIX
NOTEHOLDERS' LISTS AND
REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.01. NOTEHOLDERS' LISTS. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than 15 days after each May 1 and November 1 in each year beginning with
May 1, 1994, and at such other times as the Trustee may request in writing,
within thirty days after receipt by the Company of any such request, a list in
such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen days prior to the time
such information is furnished, except that no such list need be furnished so
long as the Trustee is acting as Note registrar.
SECTION 6.02. PRESERVATION OF LISTS. The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to the names and
addresses of the holders of Notes contained in the most recent list furnished to
it as provided in Section 6.01 or maintained by the Trustee in its capacity as
Note registrar, if so acting. The Trustee may destroy any list furnished to it
as provided in Section 6.01 upon receipt of a new list so furnished.
If the Trustee shall be required by law to disclose any information
contained in any list of Noteholders maintained by it, then each and every
holder of the Notes, by receiving and holding the same, agrees with the Company
and the Trustee that neither the Company nor the Trustee nor any paying agent
nor the Note registrar shall be held accountable by reason of the disclosure of
any such information, regardless of the source from which such information was
derived.
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SECTION 6.03. REPORTS BY THE TRUSTEE. (a) On July 15, 1994, and on or
before July 15 in every year thereafter, so long as any Notes are outstanding
hereunder, the Trustee shall transmit to the Noteholders and the Company, as
hereinafter in this Section 6.03 provided, a brief report dated as of the
preceding May 15 with respect to:
(1) its eligibility under Section 8.08, or in lieu thereof, if to the
best of its knowledge it has continued to be eligible under such Section, a
written statement to such effect; and
(2) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Notes, except action in respect of a
default, notice of which has been or is to be withheld by it in accordance
with the provisions of Section 7.08.
(b) Reports pursuant to this Section 6.03 shall be transmitted by
mail to all holders of Notes as the names and addresses of such holders appear
upon the registry books of the Company.
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND
NOTEHOLDERS IN THE EVENT OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest upon any of
the Notes as and when the same shall become due and payable, and
continuance of such default for a period of thirty days; or
(b) default in the payment of the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, or Fundamental
Change Redemption Price in respect of any of the Notes as and when the same
shall become due and payable either at maturity, in connection with any
redemption pursuant to Article Sixteen or in connection with any
redemption, by declaration or otherwise; or
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(c) failure on the part of the Company duly to observe or perform any
of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with) continued for a period of forty-five days after the date on which
written notice of such failure, requiring the Company to remedy the same,
shall have been given to the Company by the Trustee, or to the Company and
the Trustee by the holders of at least twenty-five percent in aggregate
principal amount at maturity of the Notes at the time outstanding; or
(d) the Company shall have commenced a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or any
substantial part of its property, or shall have consented to any such
relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
consecutive days;
then and in each and every such case, unless the principal of all of the Notes
shall have already become due and payable, either the Trustee or the holders of
not less than twenty-five percent in aggregate principal amount at maturity of
the Notes then outstanding hereunder, by notice in writing to the Company (and
to the Trustee if given by Noteholders), may declare due and immediately payable
the sum of the Issue Price plus accrued Original Issue Discount from the date of
issue of the Notes to the date of declaration and the interest accrued thereon,
and upon any such declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Notes contained to the
contrary notwithstanding. This provision, however, is subject to the condition
that if, at any time after the Notes shall have been so declared due and
payable, and before any judgment or decree
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for the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the Notes
and principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, and Fundamental Change Redemption Price in respect of any and
all Notes which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest (to the extent that payment of such
interest is enforceable under applicable law) and on such principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price and
Fundamental Change Redemption Price at the rate borne by the Notes (giving
effect to accrual of Original Issue Discount), to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.06, and if any and
all defaults under this Indenture, other than the nonpayment of principal amount
at maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price and interest, if any, in respect of the
Notes which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.07 -- then and in every such case the holders of a
majority in aggregate principal amount at maturity of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults and rescind and annul such declaration and its consequences; but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair any right consequent thereon. The Trustee
shall not be charged with knowledge and shall not be deemed to have notice of
any default or Event of Default, except an Event of Default under Section
7.01(a) or (b) in cases where the Trustee is acting as paying agent, unless
written notice thereof stating that such notice is a "Notice of Default" shall
have been given to a Responsible Officer by the Company or a Noteholder or any
agent of a Noteholder; and, in the absence of such written notice, the Trustee
may conclusively assume that there is no default or Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
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SECTION 7.02. PAYMENT OF NOTES ON DEFAULT; SUIT THEREFOR. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of thirty
days, or (b) in case default shall be made in the payment of the principal
amount at maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, or Fundamental Change Redemption Price in respect of any of the Notes as
and when the same shall have become due and payable, whether at maturity of the
Notes, in connection with any redemption of a Note pursuant to Article Sixteen,
or in connection with any redemption, by declaration or otherwise--then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Notes, the whole amount that then shall have become due and
payable on all such Notes for principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price,
or interest, or both, as the case may be, with interest upon the overdue
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price and Fundamental Change Redemption Price and (to the extent that
payment of such interest is enforceable under applicable law) upon the overdue
installments of interest at the rate borne by the Notes (giving effect to the
accrual of Original Issue Discount); and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any expenses or liabilities incurred by the Trustee hereunder other
than through its negligence or bad faith. Until such demand by the Trustee, the
Company may pay principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption Price and
interest, if any, in respect of the Notes to the registered holders, whether or
not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company or any other obligor on the Notes under
Title 11 of the United States
53
Code, or any other applicable law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Company, the property of the
Company or such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the Notes, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provisions of this
Section 7.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and interest, if
any, owing and unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Noteholders allowed in such judicial proceedings relative to the Company or any
other obligor on the Notes, its or their creditors, or its or their property,
and to collect and receive any monies or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of any
amounts due the Trustee under Section 8.06; and any receiver, assignee or
trustee in bankruptcy or reorganization liquidator, custodian or similar
official is hereby authorized by each of the Noteholders to make such payments
to the Trustee, and, if the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due it for
compensation, expenses, advances and disbursements including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Notes may be entitled to receive in such proceedings, whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or adopt on behalf of any Noteholder any plan of
reorganization or arrangement, affecting the Notes or the rights of any
Noteholder, or to authorize the Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by
54
the Trustee without the possession of any of the Notes, or the production
thereof on any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the holders of
the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
SECTION 7.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article Seven shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and of all other expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith;
Second: Subject to the provisions of Article Four, in case the
principal of the outstanding Notes shall not have become due and be unpaid,
to the payment of interest on the Notes in default in the order of the
maturity of the installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Notes (giving effect to
the accrual of Original Issue Discount), such payments to be made ratably
to the persons entitled thereto;
Third: Subject to the provisions of Article Four, in case the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price or Fundamental Change Redemption Price in respect of the
outstanding Notes shall have become due, by declaration or otherwise, and
be unpaid to the payment of the whole amount then owing and unpaid upon the
Notes for principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and
interest, if any, with interest on the overdue
55
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price and Fundamental Change Redemption Price, and (to the
extent that such interest has been collected by the Trustee) upon overdue
installments of interest at the rate borne by the Notes (giving effect to
the accrual of Original Issue Discount); and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon the
Notes, then to the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption
Price and interest, if any, without preference or priority of principal
amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price or Fundamental Change Redemption Price over interest, or
of interest over principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price or Fundamental Change Redemption
Price or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of
such principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and accrued
and unpaid interest;
Fourth: Subject to the provisions of Article Four, to the payment of
the remainder, if any, to the Company or any other person lawfully entitled
thereto.
SECTION 7.04. PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of default and of the continuance thereof, as hereinbefore provided, and
unless also the holders of not less than twenty-five percent in aggregate
principal amount at maturity of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.07; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in
56
any manner whatever by virtue of or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Notes (except as otherwise provided herein). For the protection and enforcement
of this Section 7.04, each and every Noteholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture and any
provision of any Note, however, the right of any holder of any Note to receive
payment of the principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price such Note, on or
after the respective due dates expressed in such Note, or to institute suit for
the enforcement of any such payment on or after such respective dates against
the Company shall not be impaired or affected without the consent of such
holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in his own behalf and for his own
benefit may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
SECTION 7.05. PROCEEDINGS BY TRUSTEE. In case of an Event of Default
hereunder the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 7.06. REMEDIES CUMULATIVE AND CONTINUING. Except as provided
in Section 2.06, all powers and remedies given by this Article Seven to the
Trustee or to the Noteholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any
57
right or power accruing upon any default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of
any such default or an acquiescence therein; and, subject to the provisions of
Section 7.04, every power and remedy given by this Article Seven or by law to
the Trustee or to the Noteholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Noteholders.
SECTION 7.07. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY
MAJORITY NOTEHOLDERS. The holders of a majority in aggregate principal
amount at maturity of the Notes at the time outstanding determined in
accordance with Section 9.04 shall have the right to direct the time, method,
and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee; PROVIDED,
HOWEVER, that (subject to the provisions of Section 8.01) the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
be advised by counsel that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors
or executive committee, or a trust committee of directors and/or Responsible
Officers shall determine that the action or proceedings so directed could
involve the Trustee in personal liability. Prior to any declaration
accelerating the maturity of the Notes, the holders of a majority in
aggregate principal amount at maturity of the Notes at the time outstanding
may on behalf of the holders of all of the Notes waive any past default or
Event of Default hereunder and its consequences except (i) a default in the
payment of principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and interest,
if any, in respect of the Notes, (ii) a failure by the Company to convert any
Notes into Common Stock or (iii) a default in respect of a covenant or
provision hereof which under Article 11 cannot be modified or amended without
the consent of the holders of all Notes then outstanding. Upon any such
waiver the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event
of Default hereunder shall have been waived as permitted by this Section
7.07, said default or Event of Default shall for all purposes of the Notes
and this Indenture be deemed to have been cured and to be not continuing; but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
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SECTION 7.08. NOTICE OF DEFAULTS. The Trustee shall, within ninety
days after the occurrence of a default, mail to all Noteholders, as the names
and addresses of such holders appear upon the registry books of the Company,
notice of all defaults known to the Trustee, unless such defaults shall have
been cured or waived before the giving of such notice (the term "defaults" for
the purpose of this Section 7.08 being hereby defined to be the events specified
in clauses (a), (b), (c), (d) and (e) of Section 7.01, not including periods of
grace, if any, or the giving of any notice, or both provided for therein); and
PROVIDED that, except in the case of default in the payment of the principal
amount at maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, Fundamental Change Redemption Price and interest, if any, in respect of
any of the Notes, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the
Noteholders.
SECTION 7.09. UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; PROVIDED, that the provisions of this Section 7.09 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Noteholder, or
group of Noteholders, holding in the aggregate more than ten percent in
principal amount at maturity of the Notes outstanding, or to any suit instituted
by any Noteholder for the enforcement of the payment of the principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price and interest, if any, in respect of any Note
on or after the due date expressed in such Note or to any suit for the
enforcement of the right to convert any Note in accordance with the provisions
of Article Fifteen.
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ARTICLE EIGHT
CONCERNING THE TRUSTEE
SECTION 8.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
60
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount at maturity
of the Notes at the time outstanding determined as provided in Section 9.04
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions of
this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
redemption of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 8.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as
otherwise provided in section 8.01,
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of
61
the Noteholders pursuant to the provisions of this Indenture, unless such
Noteholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture, coupon or other paper
or document unless requested in writing to do so by the holders of not less
than a majority in principal amount at maturity of the Notes then
outstanding; PROVIDED, HOWEVER, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of
the Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expense or liability as a condition to so
proceeding; the reasonable expenses of every such examination shall be paid
by the Company or, if paid by the Trustee or any predecessor Trustee, shall
be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder.
SECTION 8.03. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
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SECTION 8.04. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR
MAY OWN NOTES. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
SECTION 8.05. MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except to
the extent otherwise agreed in writing by the Company and the Trustee.
SECTION 8.06. COMPENSATION AND EXPENSES OF TRUSTEE. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust), and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises. The
obligations of the Company under this Section 8.06 to compensate or indemnify
the Trustee and to pay or reimburse the Trustee for expenses, disbursements
and advances shall be secured by a lien prior to that of the Notes upon all
property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the holders of particular Notes. The
obligation of the Company under this Section shall survive the satisfaction
and discharge of this Indenture.
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SECTION 8.07. OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 8.08. ELIGIBILITY OF TRUSTEE. The Trustee hereunder shall
at all times be a corporation organized and doing business under the laws of
the United States or any State or Territory thereof or of the District of
Columbia authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least five million dollars,
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.08, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.08, the
Trustee shall resign immediately in the manner and with the effect specified
in Section 8.09.
SECTION 8.09. RESIGNATION OR REMOVAL OF TRUSTEE. (a) The Trustee
may at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof to the holders of Notes at their
addresses as they shall appear on the registry books of the Company. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within
sixty days after the mailing of such notice of resignation to the
Noteholders, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Noteholder
who has been a bona fide holder of a Note or Notes for at least six months
may, subject to the provisions of Section 7.09, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee.
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Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.08 and shall fail to resign after written request
therefor by the Company or by any such Noteholder, or
(2) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount at
maturity of the Notes at the time outstanding may at any time remove the Trustee
and nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten days after notice to the Company of such nomination
the Company objects thereto, in which case the Trustee so removed or any
Noteholder, upon the terms and conditions and otherwise as in subsection (a) of
this Section 8.09 provided, may petition any court of competent jurisdiction for
an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee to any of the provisions of this Section 8.09 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.10.
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SECTION 8.10. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.09 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section
8.06.
No successor trustee shall accept appointment as provided in this
Section 8.10 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.08.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.10, the Company and the former trustee shall mail notice of the
succession of such trustee hereunder to the holders of Notes at their addresses
as they shall appear on the registry books of the Company. If the Company fails
to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 8.11. SUCCESSION BY MERGER, ETC. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the trust business of the Trustee, shall be the successor
to the Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 8.08 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of
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the Notes shall have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Notes so authenticated; and in case at that time any
of the Notes shall not have been authenticated, any successor to the Trustee
appointed by such successor trustee may authenticate such Notes either in the
name of any predecessor hereunder or in the name of the successor trustee; and
in all such cases such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of the
Trustee shall have; PROVIDED, HOWEVER, that the right to adopt the certificate
of authentication of any predecessor Trustee or authenticate Notes in the name
of any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
ARTICLE NINE
CONCERNING THE NOTEHOLDERS
SECTION 9.01. ACTION BY NOTEHOLDERS. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount at maturity of the Notes may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the taking of
any other action), the fact that at the time of taking any such action the
holders of such specified percentage have joined therein may be evidenced (a) by
any instrument or any number of instruments of similar tenor executed by
Noteholders in person or by agent or proxy appointed in writing, or (b) by the
record of the holders of Notes voting in favor thereof at any meeting of
Noteholders duly called and held in accordance with the provisions of Article
Ten, or (c) by a combination of such instrument or instruments and any such
record of such a meeting of Noteholders. Whenever the Company or the Trustee
solicits the taking of any action by the holders of the Notes, the Company or
the Trustee may fix in advance of such solicitation, a date as the record date
for determining holders entitled to take such action. The record date shall be
not more than 15 days prior to the date of commencement of solicitation of such
action.
SECTION 9.02. PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the
provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Noteholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.
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The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.06.
SECTION 9.03. WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the
Trustee, any paying agent, any conversion agent and any Note registrar may deem
the person in whose name such Note shall be registered upon the books of the
Company to be, and may treat him as, the absolute owner of such Note (whether or
not such Note shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and interest, if any, in
respect of such Note, for conversion of such Note and for all other purposes;
and neither the Company nor the Trustee nor any paying agent nor any conversion
agent nor any Note registrar shall be affected by any notice to the contrary.
All such payments so made to any holder for the time being, or upon his order,
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for monies payable upon any such Note.
SECTION 9.04. COMPANY-OWNED NOTES DISREGARDED. In determining whether
the holders of the requisite aggregate principal amount at maturity of Notes
have concurred in any direction, consent, waiver or other action under this
Indenture, Notes which are owned by the Company or any other obligor on the
Notes or by any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any other obligor on
the Notes shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; PROVIDED that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action only Notes which a Responsible Officer knows are so owned shall
be so disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or a person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee. Upon request of
the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Notes, if any, known by the Company to
be owned or held by or for the account of any of the above described persons;
and, subject to Section 8.01, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts
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therein set forth and of the fact that all Notes not listed therein are
outstanding for the purpose of any such determinations.
SECTION 9.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.01, of the taking of any action by the holders of the percentage in
aggregate principal amount at maturity of the Notes specified in this Indenture
in connection with such action, any holder of a Note which is shown by the
evidence to be included in the Notes the holders of which have consented to such
action may, by filing written notice with the Trustee at its Principal Office
and upon proof of holding as provided in Section 9.02, revoke such action so far
as concerns such Note. Except as aforesaid any such action taken by the holder
of any Note shall be conclusive and binding upon such holder and upon all future
holders and owners of such Note and of any Notes issued in exchange or
substitution therefor, irrespective of whether any notation in regard thereto is
made upon such Note or any Note issued in exchange or substitution therefor.
ARTICLE TEN
NOTEHOLDERS` MEETINGS
SECTION 10.01. PURPOSES OF MEETINGS. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article Ten for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by Noteholders pursuant to any of the provisions of Article Seven;
(2) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article Eight;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount at maturity of
the Notes under any other provision of this Indenture or under applicable
law.
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SECTION 10.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any
time call a meeting of Noteholders to take any action specified in Section
10.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Noteholders, setting forth the time and the place
of such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 9.01, shall
be mailed to holders of Notes at their addresses as they shall appear on the
registry books of the Company. Such notice shall also be mailed to the Company.
Such notices shall be mailed not less than twenty nor more than ninety days
prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the
holders of all Notes then outstanding are present in person or by proxy or if
notice is waived before or after the meeting by the holders of all Notes
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
SECTION 10.03. CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent in aggregate principal amount at maturity of the
Notes then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty days after receipt of such request, then
the Company or such Noteholders may determine the time and the place for such
meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
SECTION 10.04. QUALIFICATIONS FOR VOTING. To be entitled to vote at
any meeting of Noteholders a person shall (a) be a holder of one or more Notes
or (b) be a person appointed by an instrument in writing as proxy by a holder of
one or more Notes. The only persons who shall be entitled to be present or to
speak at any meeting of Noteholders shall be the persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
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SECTION 10.05. REGULATIONS. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount at maturity of the Notes represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting each
Noteholder or proxy shall be entitled to one vote for each $1,000 principal
amount at maturity of Notes held or represented by him; PROVIDED, HOWEVER, that
no vote shall be cast or counted at any meeting in respect of any Note
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Notes held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Noteholders. Any
meeting of Noteholders duly called pursuant to the provisions of Section 10.02
or 10.03 may be adjourned from time to time by a majority of those present,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
SECTION 10.06. VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount at maturity of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the
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notice of the meeting and showing that said notice was mailed as provided in
Section 10.02. The record shall show the principal amount at maturity of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
SECTION 10.07. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article
Ten contained shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Noteholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Noteholders under any of the provisions of this Indenture or of the Notes.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.06;
(b) subject to Article Four, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article Twelve hereof;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a
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default in any such additional covenants, restrictions or conditions a
default or an Event of Default permitting the enforcement of all or any of
the several remedies provided in this Indenture as herein set forth;
PROVIDED, HOWEVER, that in respect of any such additional covenant,
restriction or condition such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued hereunder
in fully registered form and to make all appropriate changes for such
purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which shall not adversely
affect the interests of the holders of the Notes in any material respect;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
section 11.01 may be executed by the Company and the Trustee without the consent
of the holders of
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any of the Notes at the time outstanding, notwithstanding any of the provisions
of Section 11.02.
SECTION 11.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
With the consent (evidenced as provided in Article Nine) of the holders of not
less than 66 2/3% in aggregate principal amount at maturity of the Notes at the
time outstanding, the Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Notes; PROVIDED, HOWEVER, that no such
supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of interest thereon, change the
rate of accrual or extend the time of payment in connection with Original Issue
Discount, or reduce the principal amount at maturity thereof, or reduce any
amount payable on redemption thereof or change the obligation of the Company to
make redemption of any Note pursuant to Article Sixteen, or impair or affect the
right of any Noteholder to institute suit for the payment thereof, or make the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or interest, if any, in
respect thereof payable in any coin or currency other than that provided in the
Notes, or modify the provisions of this Indenture with respect to the
subordination of the Notes in a manner adverse to the Noteholders, or impair the
right to convert the Notes into Common Stock subject to the terms set forth
herein, including Section 15.06, without the consent of the holder of each Note
so affected, or (ii) reduce the aforesaid percentage of Notes, the holders of
which are required to consent to any such supplemental indenture, without the
consent of the holders of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under
this Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be
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sufficient if such consent shall approve the substance thereof.
SECTION 11.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution
of any supplemental indenture pursuant to the provisions of this Article Eleven,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Notes shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 11.04. NOTATION ON NOTES. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article Eleven may bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee and delivered in exchange for the Notes
then outstanding, upon surrender of such Notes then outstanding.
SECTION 11.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO
BE FURNISHED TO THE TRUSTEE. The Trustee, subject to the provisions of
Sections 8.01 and 8.02, may receive an Officers' Certificate and an Opinion
of Counsel as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article Eleven.
ARTICLE TWELVE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Subject to the provisions of Section 12.02, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of the Company
with or into any other corporation or corporations (whether or not affiliated
with the Company), or successive consolidations or mergers in which the Company
or its successor or successors shall be a party or parties, or shall prevent any
sale, conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other corporation
(whether or not affiliated
75
with the Company) authorized to acquire and operate the same and which shall be
organized under the laws of a State of the United States or the District of
Columbia; PROVIDED, HOWEVER, and the Company hereby covenants and agrees, that
upon any such consolidation, merger, sale, conveyance or lease, the due and
punctual payment of the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price
and interest, if any, in respect of all of the Notes, according to their tenor,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company, shall be expressly
assumed, by supplemental indenture satisfactory in form to the Trustee, executed
and delivered to the Trustee by the corporation (if other than the Company)
formed by such consolidation, or into which the Company shall have been merged,
or by the corporation which shall have acquired or leased such property, and
such supplemental indenture shall provide for the applicable conversion rights
set forth in Section 15.06.
SECTION 12.02. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and interest, if
any, in respect of all of the Notes and the due and punctual performance of all
of the covenants and conditions of this Indenture to be performed by the
Company, such successor corporation shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the party of the
first part. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of Chiron Corporation any or all of
the Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Notes which previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication, and any Notes
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution hereof.
In the event of any such consolidation, merger, sale, conveyance or lease, the
person named as the "Company" in the first paragraph of this
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Indenture or any successor which shall thereafter have become such in the manner
prescribed in this Article Twelve may be dissolved, wound up and liquidated at
any time thereafter and such person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
SECTION 12.03. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee,
subject to Sections 8.01 and 8.02, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance or lease and any such assumption complies with the provisions
of this Article Twelve.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. DISCHARGE OF INDENTURE. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes which shall have been destroyed, lost or stolen and in
lieu of or in substitution for which other Notes shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Notes not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption all of the Notes (other than any Notes which shall
have been mutilated, destroyed, lost or stolen and in lieu of or in substitution
for which other Notes shall have been authenticated and delivered) not
theretofore canceled or delivered to the Trustee for cancellation, including
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and interest, if any, due
or to become due to such date of maturity or redemption date, as the case may
be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i) remaining rights of registration of
transfer, substitution and exchange and conversion of Notes, (ii) rights
hereunder of Noteholders to receive payments of principal amount at maturity,
Issue Price, accrued Original Issue Discount,
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Redemption Price, Fundamental Change Redemption Price and interest, if any, in
respect of the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by Section 17.05
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
SECTION 13.02. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE.
Subject to Article Four and Section 13.04, all monies deposited with the Trustee
pursuant to Section 13.01 shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Company if
acting as its own paying agent), to the holders of the particular Notes for the
payment or redemption of which such monies have been deposited with the Trustee,
of all sums due and to become due thereon for principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price and interest, if any.
SECTION 13.03. PAYING AGENT TO REPAY MONIES HELD. Upon the
satisfaction and discharge of this Indenture, all monies then held by any paying
agent of the Notes (other than the Trustee) shall, upon demand of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
SECTION 13.04. RETURN OF UNCLAIMED MONIES. Any monies deposited with
or paid to the Trustee for payment of the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price or interest, if any, in respect of Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which such amounts shall have become due and payable, shall be repaid to the
Company by the Trustee on demand and all liability of the Trustee shall
thereupon cease with respect to such monies; and the holder of any of the Notes
shall thereafter look only to the Company for any payment which such holder may
be entitled to collect.
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ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01. INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental Change Redemption
Price and interest, if any, in respect of any Note, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in this Indenture or in any
supplemental indenture, or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issue of the Notes.
ARTICLE FIFTEEN
CONVERSION OF NOTES
SECTION 15.01. RIGHT TO CONVERT. Subject to and upon compliance with
the provisions of this Article, the holder of any Note shall have the right, at
his option, at any time after 60 days following the latest date of original
issuance and prior to the close of business on November 17, 2000 (except that,
with respect to any Note or portion of a Note which shall be called for
redemption such right shall terminate, except as provided in the third paragraph
of Section 15.02, at the close of business on the business day next preceding
the date fixed for redemption of such Note or portion of a Note and such right
shall terminate with respect to any Note or portion thereof subject to a duly
completed and delivered election for redemption pursuant to Article Sixteen,
unless in each case the Company shall default in payment due upon redemption or
redemption thereof) to convert the principal amount at maturity of any such
Note, or any portion of such principal amount at maturity which is $1,000 or a
multiple thereof, into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) obtained by dividing the
principal amount at maturity of the Note or portion thereof surrendered for
conversion by $1,000 and multiplying the result so obtained by the Conversion
Rate in effect at such time, by surrender of
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the Note so to be converted in whole or in part in the manner provided in
Section 15.02. A holder of Notes is not entitled to any rights of a holder of
Common Stock until such holder has converted his Notes.
SECTION 15.02. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON
STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to
exercise the conversion privilege, the holder of any Note to be converted in
whole or in part shall surrender such Note at an office or agency maintained by
the Company pursuant to Section 5.02, accompanied by the funds, if any, required
by the last paragraph of this Section, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the Company at such office or agency that the
holder elects to convert such Note or the portion thereof specified in said
notice. Such notice shall also state the name or names (with address) in which
the certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 15.07. Each Note surrendered for
conversion shall, unless the shares issuable on conversion are to be issued in
the same name as the registration of such Note, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or his duly authorized attorney.
As promptly as practicable after the surrender of such Note and the
receipt of such notice and funds, if any, as aforesaid, the Company shall issue
and shall deliver at such office or agency to such holder, or on his written
order, a certificate or certificates for the number of full shares issuable upon
the conversion of such Note or portion thereof in accordance with the provisions
of this Article and a check or cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, as provided in
Section 15.03. In case any Note of a denomination greater than $1,000 principal
amount at maturity shall be surrendered for partial conversion, and subject to
Section 2.03, the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the holder of the Note so surrendered,
without charge to him, a new Note or Notes in authorized denominations in an
aggregate principal amount at maturity equal to the unconverted portion of the
surrendered Note.
Each conversion shall be deemed to have been effected on the date on
which such Note shall have been surrendered (accompanied by the funds, if any,
required by the last paragraph of this Section) and such notice shall have been
received by the Company, as aforesaid, and the person in whose name any
certificate or certificates for shares of
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Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
PROVIDED, HOWEVER, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which such
Note shall have been surrendered.
Except as described in this Section, holders of the Notes will not be
entitled to any payment or adjustment on account of accrued Original Issue
Discount or accrued and unpaid interest upon conversion of the Notes. The
Company's delivery of the fixed number of shares of Common Stock into which the
Notes are convertible will be deemed to satisfy the Company's obligation to pay
the principal amount at maturity of the Notes and all accrued interest and
Original Issue Discount that has not previously been (or is not simultaneously
being) paid. The Common Stock is treated as issued first in payment of accrued
interest and Original Issue Discount and then in payment or principal.
Any Note or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the opening of business on such interest payment date shall (unless such
Note or portion thereof being converted shall have been called for redemption on
a date in such period) be accompanied by payment, in New York Clearing House
funds of an amount equal to the interest otherwise payable on such interest
payment date on the principal amount at maturity being converted; PROVIDED,
HOWEVER, that no such payment need be made if there shall exist at the time of
conversion a default in the payment of interest on the Notes; PROVIDED FURTHER,
HOWEVER, that no such payment shall be required in respect of any Note or
portion thereof being called for redemption by the Company on November 17, 1996.
An amount equal to such payment (or, in the case of a redemption by the Company
on November 17, 1996, equal to the interest otherwise payable on such date)
shall be paid by the Company on such interest payment date to the holder of such
Note at the close of business on such record date; PROVIDED, HOWEVER, that if
the Company shall default in the payment of interest on such interest payment
date, such amount shall be paid to the person who made such required payment or,
in the case of a redemption by the Company on November 17, 1996, to the person
who converted such Note. Except as provided above in this Section, no adjustment
shall be made for Original Issue Discount or interest accrued on any Note
converted or for dividends on any shares issued upon the conversion of such Note
as provided in this Article.
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SECTION 15.03. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Notes. If more than one Note shall be surrendered
for conversion at one time by the same holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount at maturity of the Notes (or specified portions
thereof to the extent permitted hereby) so surrendered. If any fractional share
of stock would be issuable upon the conversion of any Note or Notes, the Company
shall make an adjustment therefor in cash at the current market value thereof.
For these purposes, the current market value of a share of Common Stock shall be
the last reported sale price on the first day (which is not a Legal Holiday as
defined in Section 17.06) immediately preceding the day on which the Notes (or
specified portions thereof) are deemed to have been converted and such last
reported sale price shall be determined as provided in subsection (f) of Section
15.05.
SECTION 15.04. CONVERSION RATE. The Conversion Rate shall be as
specified in the form of Note hereinabove set forth, subject to adjustment as
provided in this Article.
SECTION 15.05. ADJUSTMENT OF CONVERSION RATE. The Conversion Rate
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend, or make a
distribution, in shares of its Common Stock, on its Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, or
(iii) combine its outstanding Common Stock into a smaller number of shares,
the Conversion Rate in effect immediately prior thereto shall be adjusted
so that the holder of any Note thereafter surrendered for conversion shall
be entitled to receive the number of shares of Common Stock of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above had such Note been converted
immediately prior to the happening of such event. An adjustment made
pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend and shall become effective
immediately after the effective date in the case of subdivision or
combination.
(b) In case the Company shall issue rights or warrants to all holders
of its Common Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase Common
Stock at a price per share less than the Current Market Price per share of
Common Stock (as defined in subsection (f) below) at the record date for
the
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determination of stockholders entitled to receive such rights or warrants,
the Conversion Rate in effect immediately prior thereto shall be adjusted
so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the denominator shall be the
number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate
offering price of the total number of shares so offered would purchase at
such Current Market Price, and of which the numerator shall be the number
of shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase. Such adjustment shall be made
successively whenever any such rights or warrants are issued, and shall
become effective immediately after such record date. In determining whether
any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company
for such rights or warrants, the value of such consideration, if other than
cash, to be determined by the Board of Directors.
(c) In case the Company shall distribute to all holders of its Common
Stock any shares of any class of capital stock of the Company (other than
Common Stock) or evidences of its indebtedness or assets (excluding cash
dividends or other distributions to the extent paid from retained earnings
of the Company) or rights or warrants to subscribe for or purchase any of
its securities (excluding those referred to in subsection (b) above), then
in each such case the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date of such distribution by a fraction of
which the denominator shall be the Current Market Price per share (as
defined in subsection (f) below) of the Common Stock on the record date
mentioned below less the fair market value on such record date (as
determined by the Board of Directors of the Company, whose determination
shall be conclusive, and described in a certificate filed with the Trustee)
of the portion of the capital stock or assets or evidences of indebtedness
so distributed or of such rights or warrants applicable to one share of
Common Stock, and the numerator shall be the Current Market Price per share
(as defined in subsection (f) below) of the Common Stock on such record
date. Such adjustment shall become effective immediately after the
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record date for the determination of shareholders entitled to receive such
distribution.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of
(A) the amount per share of Common Stock of the next preceding quarterly
cash dividend on the Common Stock to the extent such preceding quarterly
dividend did not require any adjustment of the Conversion Rate pursuant to
this Section 15.05(d) (as adjusted to reflect subdivisions or combinations
of the Common Stock), and (B) 3.75% of the average of the last reported
sales price of the Common Stock (determined as provided in Section
15.05(f)) during the ten Trading Days (as defined in Section 15.05(f)) next
preceding the date of declaration of such dividend and (y) any dividend or
distribution in connection with the liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary), then, in such case,
unless the Company elects to reserve such cash for distribution to the
holders of the Notes upon the conversion of the Notes so that any such
holder converting Notes will receive upon such conversion, in addition to
the shares of Common Stock to which such holder is entitled, the amount of
cash which such holder would have received if such holder had, immediately
prior to the record date for such distribution of cash, converted its Notes
into Common Stock, the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the record date by a fraction of which the
denominator shall be the Current Market Price of the Common Stock on the
record date less the amount of cash so distributed (and not excluded as
provided above) applicable to one share of Common Stock and the numerator
shall be such Current Market Price of the Common Stock, such adjusted to be
effective immediately prior to the opening of business on the day following
the record date; PROVIDED, HOWEVER, that in the event the portion of the
cash so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the record
date, in lieu of the foregoing adjustment, adequate provision shall be made
so that each Noteholder shall have the right to receive upon conversion the
amount of cash such holder would have received had such holder converted
each Note on the record date. If such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such dividend or
distribution had not been declared.
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(e) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such subsidiary of consideration per share of Common Stock
having a fair market value (as determined by the Board of Directors or, to
the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive, and described in a
resolution of the Board of Directors or such duly authorized committee
thereof, as the case may be, at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer
(as it shall have been amended) that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Expiration Time,
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior
to the Expiration Time by a fraction of which the denominator shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time and the numerator shall be sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on Expiration Time and the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become effective immediately prior to
the opening of business on the day following the Expiration Time. If the
Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate which
would then be effect if such tender or exchange offer had not been made.
(f) For the purpose of any computation under subsections (b), (c),
(d) and (e) above, the Current Market Price per share of Common Stock at
any date shall be deemed to be the average of the last reported sale prices
for the ten consecutive Trading Days (as defined below) preceding the day
before the record date with respect to any distribution, issuance or other
event
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requiring such computation. The last reported sale price for each day shall
be (i) the last reported sale price of Common Stock on the National Market
of the NASDAQ System, or any similar system of automated dissemination of
quotations of securities prices then in common use, if so quoted, or (ii)
if not quoted as described in clause (i), the mean between the high bid and
low asked quotations for Common Stock as reported by the National Quotation
Bureau Incorporated if at least two securities dealers have inserted both
bid and asked quotations for such class of stock on at least 5 of the 10
preceding days, or (iii) if the Common Stock is listed or admitted for
trading on any national securities exchange, the last sale price, or the
closing bid price if no sale occurred, of such class of stock on the
principal securities exchange on which such class of stock is listed. If
the Common Stock is quoted on a national securities or central market
system, in lieu of a market or quotation system described above, the last
reported sale price shall be determined in the manner set forth in clause
(ii) of the preceding sentence if bid and asked quotations are reported but
actual transactions are not, and in the manner set forth in clause (iii) of
the preceding sentence if actual transactions are reported. If none of the
conditions set forth above is met, the last reported sale price of Common
Stock on any day or the average of such last reported sale prices for any
period shall be the fair market value of such class of stock as determined
by a member firm of the New York Stock Exchange, Inc. selected by the
Company. As used herein the term "Trading Days" with respect to Common
Stock means (i) if the Common Stock is quoted on the National Market of the
NASDAQ System or any similar system of automated dissemination of
quotations of securities prices, days on which trades may be made on such
system or (ii) if the Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities
exchange is open for business.
(g) Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"):
(i) are deemed to be transferred with such shares of Common
Stock,
(ii) are not exercisable, and
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(iii) are also issued in respect of future issuances of Common
Stock,
shall not be deemed distributed for purposes of Section 15.05(a) until the
occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with respect
thereto, that shall have resulted in an adjustment to the Conversion Rate
under Section 15.05(a), (1) in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to
the per share redemption or repurchase price received by a holder of Common
Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as
of the date of such redemption or repurchase, and (2) in the case of any
such rights or warrants all of which shall have expired without exercise by
any holder thereof, the Conversion Rate shall be readjusted as if such
issuance had not occurred.
(h) No adjustment in the Conversion Rate shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such rate; PROVIDED, HOWEVER, that any adjustments which by reason of this
subsection (h) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article Fifteen shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may
be. Anything in this Section 15.05 to the contrary notwithstanding, the
Company shall be entitled to make such increases in the Conversion Rate, in
addition to those required by this Section 15.05, as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock or
securities, or a distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders
shall not be taxable. To the extent permitted by applicable law, the
Company from time to time may increase the Conversion Rate by any amount
for any period of time if the period is at least 20 days, the increase is
irrevocable during the period and the Board of Directors shall have made a
determination that such increase would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion
Rate is so increased, the Company shall mail to Noteholders and file with
the Trustee and the
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Conversion Agent a notice of the increase. The Company shall mail the
notice at least 15 days before the date the increased Conversion Rate takes
effect. The notice shall state the increased Conversion Rate and the period
it will be in effect.
(i) Whenever the Conversion Rate is adjusted, as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the date on which such
adjustment becomes effective and shall mail such notice of such adjustment
of the Conversion Rate to the holder of each Note at his last address
appearing on the Note register provided for in Section 2.05 of this
Indenture.
(j) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the holder of any Note converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 15.03.
SECTION 15.06. EFFECT OF RECLASSIFICATION, CONSOLIDATION. MERGER
OR SALE. If any of the following events occur, namely (i) any reclassification
or change of outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture
providing that each Note
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shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of a number of shares of Common Stock issuable upon conversion of
such Notes immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.05 of this Indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers, combinations, and sales.
SECTION 15.07. TAXES ON SHARES ISSUED. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any U.S. tax in respect of the issue thereof. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Note converted, and the Company shall not be required to
issue or deliver any such stock certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
SECTION 15.08. RESERVATION OF SHARES; SHARES TO BE FULLY PAID;
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares, sufficient shares to provide for the conversion of the Notes from time
to time as such Notes are presented for conversion.
Before taking any action which would cause an adjustment increasing
the Conversion Rate so that the shares of Common Stock issuable upon conversion
of the Notes would be issued for less than the par value of such Common Stock,
the Company will take all corporate action which may be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of
such Common Stock at such adjusted Conversion Rate.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and nonassessable
by the Company and free
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from all taxes, liens and charges with respect to the issue thereof.
The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any Federal or State law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible endeavor to secure such registration
or approval, as the case may be.
The Company further covenants that if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange the Company will, if permitted by the rules of such exchange, list and
keep listed so long as the Common Stock shall be so listed on such exchange, all
Common Stock issuable upon conversion of the Notes.
SECTION 15.09. RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Rate or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 8.01, neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.06 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.06 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.01 may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with
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the Trustee prior to the execution of any such supplemental indenture) with
respect thereto.
SECTION 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register, provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least fifteen days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
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ARTICLE SIXTEEN
REDEMPTION OF NOTES AT OPTION OF HOLDERS
SECTION 16.01. OPTION TO ELECT REDEMPTION UPON A FUNDAMENTAL CHANGE.
(a) If a Fundamental Change shall occur at any time prior to November 17, 2000,
each holder of Notes shall have the right, at such holder's option, to require
the Company to redeem any or all of such holder's Notes on the date (the
"Fundamental Change Redemption Date") (or if such date is not a business day,
the next succeeding business day) that is 30 days after the date of the
Company's notice of such Fundamental Change. Any redemption of such holder's
Notes in part shall be in the amount of $1,000 principal amount at maturity or
any multiple thereof. Such redemption shall be made at the applicable
Redemption Price set forth in the form of Note; provided that, with respect to a
Fundamental Change, if the Applicable Price is less than the Reference Market
Price, the Company shall redeem such Notes at a price equal to the foregoing
Redemption Price multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price. In each case, the Company shall also pay
accrued interest, if any, on such Notes to the Fundamental Change Redemption
Date; provided that if such Fundamental Change Redemption Date is between a May
1 and the next succeeding May 17 or between a November 1 and the next succeeding
November 17, then the interest payable on such date shall be paid to the holder
of record of the Note on the next preceding May 1 or November 1. The Company
shall mail to all holders of record of the Notes a notice of the occurrence of a
Fundamental Change and of the redemption right arising as a result thereof on or
before the 10th day after the occurrence of such Fundamental Change. The Company
shall promptly furnish the Trustee a copy of such notice.
(b) For a Note to be so redeemed at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose in New York, New York such Note with the form entitled "Option to Elect
Redemption Upon a Fundamental Change" on the reverse thereof (a "Fundamental
Change Redemption Notice") duly completed, together with such Notes duly
endorsed for transfer, on or before the 30th day after the date of such notice
(or if such 30th day is not a business day, the immediately preceding business
day). All questions as to the validity, eligibility (including time of receipt),
withdrawal and acceptance of any Note for redemption shall be determined by the
Company, whose determination shall be final and binding.
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A Fundamental Change Redemption Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Trustee at any time
prior to the close of business on the Fundamental Change Redemption Date to
which it relates specifying:
(1) the certificate number of the Note in respect of which such
notice of withdrawal is being submitted,
(2) the principal amount at maturity of the Note with respect to
which such notice of withdrawal is being submitted, and
(3) the principal amount at maturity, if any, of such Note which
remains subject to the original Fundamental Change Redemption Notice and
which has been or will be delivered for redemption by the Company.
SECTION 16.02. DEPOSIT OF FUNDS FOR REDEMPTION. On or prior to the
date any Note is required to be paid pursuant to Section 16.02, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.04) an amount of money sufficient to redeem on the
applicable Fundamental Change Redemption Date all the Notes to be repaid on such
date at the appropriate Redemption Price, together with accrued interest to the
date fixed for redemption.
ARTICLE SEVENTEEN
MISCELLANEOUS PROVISIONS
SECTION 17.01. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements in this Indenture contained by
the Company shall bind its successors and assigns whether so expressed or not.
SECTION 17.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
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SECTION 17.03. ADDRESSES FOR NOTICES, ETC. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company may be given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box addressed (until another address is filed by the Company
with the Trustee) to:
Chiron Corporation
4560 Horton Street
Emeryville, California 94608
Attention: Chief Financial Officer
Telephone Number: (510) 655-8730
Any notice, direction, request or demand hereunder to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the Principal Office of the Trustee, which office is, at the
date as of which this Indenture is dated, located at:
The First National Bank of Boston
Blue Hills Office Park
150 Royall Street
Canton, Massachusetts 02021
Attention: Corporate Trust Division
Mail Stop 45-02-15
(Chiron Corporation, 1.90% Convertible
Subordinated Notes due 2000)
Telephone Number: (617) 575-2000
Facsimile Number: (617) 575-2078
SECTION 17.04. GOVERNING LAW. This Indenture and each Note shall be
deemed to be a contract made under the laws of New York, and for all purposes
shall be construed in accordance with the laws of New York.
SECTION 17.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
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SECTION 17.06. LEGAL HOLIDAYS. In any case where the date of maturity
of interest on or principal of the Notes or the date fixed for redemption or
repayment of any Note will be a legal holiday or a day on which banking
institutions in New York, New York are authorized by law or executive order to
close ("Legal Holidays"), then payment of such interest on or principal of the
Notes need not be made on such date but may be made on the next succeeding day
not a Legal Holiday with the same force and effect as if made on the date of
maturity or the date fixed for redemption or repayment and no interest shall
accrue for the period from and after such date.
SECTION 17.07. NO SECURITY INTEREST CREATED. Nothing in this Indenture
or in the Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction where property of
the Company or its subsidiaries is located.
SECTION 17.08. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any person, other than the parties
hereto, any paying agent, any Note registrar and their successors hereunder, the
holders of Notes and the holders of Senior Indebtedness, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 17.09. TABLE OF CONTENTS, HEADINGS, ETC. The table of
contents and the titles and headings of the articles and sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
SECTION 17.10. EXECUTION IN COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
The First National Bank of Boston hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
CHIRON CORPORATION
By: /s/ [ILLEGIBLE]
------------------------------
Chief Financial Officer
Attest:
/s/ [ILLEGIBLE]
- ------------------------------
Title: Secretary
[Seal]
THE FIRST NATIONAL BANK OF BOSTON
By:
------------------------------
Attest:
- ------------------------------
Title:
State of California
SS.
County of Alameda
On November 16, 1993 before me, Kay E. Robertson, Notary Public, personally
appeared Dennis L. Winger, known to me to be the person whose name is subscribed
to the within instrument and acknowledged that he executed the same in his
authorized capacity and that by his signature on the instrument the person or
the entity upon behalf of which the person acted, executed the instrument.
OFFICIAL SEAL
[SEAL] KAY E. ROBERTSON
NOTARY PUBLIC - CALIFORNIA
WITNESS my hand and official seal ALAMEDA COUNTY
My Comm. Expires: Feb. 19, 1994
/s/ K. E. Robertson
- ---------------------------------- L.S.
Notary's signature
My Commission Expires: 2/19/94
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
CHIRON CORPORATION
By:
-----------------------------------
Chief Financial Officer
Attest:
- -----------------------------------
Title:
[Seal]
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ K. Caldwell
-----------------------------------
Senior Account Administrator
Attest:
/s/ [ILLEGIBLE]
- -----------------------------------
Title: ASSISTANT CASHIER
COMMONWEALTH OF MASSACHUSETTS )
) ss.:
COUNTY OF )
On the ___ day of November, 1993 before me personally came Kelly
Caldwell, to me known, who, being by me duly sworn did depose and say that she
resides at 150 Royall St Canton Ma that she is a Sr. Acct. Administrator of The
First National Bank of Boston, one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by the authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ [ILLEGIBLE]
------------------------------
Notary Public
My Commission Expires 9/27/96
[Seal]